A Reuters ballot of 42 economists had forecast retail inflation in October to ease to 0.48%.
Meals costs, which account for almost half of the Shopper Value Index (CPI) basket, fell 5.02% year-on-year in October in opposition to a revised fall of two.33% in September, the bottom of the present CPI collection.
“The decline in headline inflation and meals inflation throughout the month of October is especially attributed to the complete month's affect of decline in GST, beneficial base impact and to the drop in inflation of Oils and fat, Greens, Fruits, Egg, Footwear, Cereals and merchandise, Transport and Communication and so on,” mentioned the central authorities in a press launch.
Inflation is cooling quickly at the same time as the most recent official knowledge confirmed Asia's third-largest economic system grew almost 8% within the April-June quarter, with the central financial institution anticipated to chop rates of interest once more subsequent month.
In the meantime, inflation charges for rural and concrete stood at –4.85% and -5.18%, respectively. The year-on-year inflation price for the gas and light-weight class was recorded at 1.98% in October 2025.
Vegetable costs
Vegetable costs declined 27.57% after a 21.38% fall a month in the past.The costs have fallen by double digits for six consecutive months on an annual foundation, holding general meals inflation, which accounts for almost half of the buyer worth index (CPI) basket, in verify.
Whereas inflation has been under the RBI's 4% goal since February, economists say this masks shifts in family spending patterns.
The Family Consumption Expenditure Survey for 2023-24 confirmed the share of meals within the common Indian family's price range has declined.
RBI's inflation outlook
RBI throughout its Financial Coverage Committee assembly final month signalled {that a} benign inflation backdrop offered scope for additional coverage easing to assist development, even because it held charges regular as anticipated.
The central financial institution mentioned inflation has eased and is more likely to average additional in FY26, supported by GST price cuts, a beneficial outlook on meals costs and improved provide prospects. Nonetheless, it cautioned that geopolitical tensions and tariff-related commerce disruptions may weigh on the outlook.
For the complete yr FY26, the RBI has projected headline inflation at 2.6%, considerably decrease than the three.1% forecast made in August. Quarter-wise estimates are: 1.8% in Q2, 1.8% in Q3, This fall at 4% and Q1 FY27 at 4.5%. The central financial institution maintained that dangers to the outlook are “evenly balanced.”
The RBI additionally famous that Core inflation has remained largely contained at 4.2% in August.
Governor Sanjay Malhotra mentioned, “The MPC noticed that the general inflation outlook has turned much more benign in the previous few months on account of a pointy decline in meals costs and the rationalisation of GST charges.”
“General the benign inflation and development trajectory does present room for 25-50bp price cuts. Nonetheless, the festive-linked surge in retail gross sales might make it troublesome to gauge the underlying sustainable demand within the economic system and therefore the timing of easing might develop into tougher,” Kotak Mahindra Financial institution's Bhardwaj added.
