The CPI print sets the stage for another rate cut by the RBI in its June policy of 25 bps, they said.
The two vegetables, which account for 24 percent of the cost of a home-cooked meal, have been witnessing double-digit inflation
The overall CPI index has moved up from 147.2 in October 2019 to 196.8 in October 2024, an increase of a third in 5 years. And the Food & Beverage index has gone up by 40 percent over the period. Small wonder that the consumption of the masses has been hit
Onion prices were up 46 percent, while the potato was 51 percent higher compared with the previous year
"Inflation may plateau going further, especially the food part," the official said, adding that the steps that have been taken by both the central government and the RBI will likely keep a lid on inflation.
Even as the finance ministry expects CPI numbers to cool down going ahead, the government will continue to take more steps to contain inflation but avoid any knee-jerk reactions, Somanathan told Moneycontrol in an interview.
It is unlikely that the central bank will hike rates in the next few months, Gupta said.
Unseasonal rains, the resulting disruption in transportation and supply chains have affected the prices of a number of vegetables. Tomato prices are expected to touch Rs 300 a kg, but the government’s July 12 directive might provide some respite.