India's retail inflation eases to 4.87% in October

(Reuters) - India's retail inflation eased in October on lower food prices, edging closer to the central bank's medium-term target of 4%, which it has said would need to be firmly in sight before it can start lowering rates.

Annual retail inflation fell 4.87% in October, down from 5.02% the previous month. A Reuters poll of 53 economists had forecast a rate of 4.80%.

Food inflation, which accounts for nearly half of the overall consumer price basket, rose 6.61% in October as compared with 6.56% in September.

COMMENTARY:

GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI

"Led by supportive base effect, India CPI inflation for October came in at 4.87% despite a sequential uptick in food prices that was led by protein items and vegetables. The continued subdued print of core inflation, however, offers respite and would allow the MPC (Monetary Policy Committee) room to maintain status quo through this financial year."

UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI

"The CPI inflation came in line with our expectations. The moderation provides some relief, especially as core inflation has remained comfortable. However, we expect the trend of sub-5% headline inflation to remain brief with most of FY24 ahead likely to remain above 5%."

"Overall, we continue to expect the MPC to remain on an 'extended pause' phase in rates, with liquidity being used as a more frequent tool to manage the stance."

SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM

"CPI inflation moderated below 5% in October. However, it was higher than expected driven by a sequential increase in vegetables (particularly onions) and pulses inflation. Core inflation inched lower to 4.2%. Inflation could inch back up above 5% next month and food inflation continues to remain a concern."

(Reporting by Rama Venkat and Nishit Navin in Bengaluru; Editing by Savio D'Souza)