Record Low Inflation Sparks Economic Optimism

Retail inflation plunged to an all-time low of 0.25% in October, driven by lower GST rates and falling food prices. The decline provides the Reserve Bank's Monetary Policy Committee an opportunity to focus on growth amid external challenges, with potential rate cuts expected if economic growth lags.

Retail inflation plummeted to a historic low in October at 0.25%, as a result of reduced GST rates on nearly 380 commonly used items and subdued prices of essential goods like vegetables and eggs.

This marked the lowest inflation rate in the current Consumer Price Index (CPI) series. With inflation in rural and urban areas also registering low figures, experts anticipate the Reserve Bank's Monetary Policy Committee may consider a rate cut in December.

The decline in inflation was aided by the full impact of the GST rate cuts, a favorable base effect, and easing prices in food, transport, and communication sectors, bolstering corporate margins and debt-servicing capacities.

(With inputs from agencies.)