(Reuters) -India’s annual retail inflation slowed to a record low of 0.25% in October from a revised 1.44% in September, government data showed on Wednesday.
A Reuters poll had projected retail inflation at 0.48%.
COMMENTARY:
MADAN SABNAVIS, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
“CPI inflation at 0.3% is close to our forecast of 0.4%. But this number may not really matter from the monetary policy view as it is more or less on expected lines. The average for the year would also hover around 2.4-2.6% with such tendencies to continue till December before base effects wear out and inflation rises. We can expect inflation to touch 4% by March 2026.
“The overall picture would be positive for inflation in the coming months as the present trends continue.”
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANG, MUMBAI
“Core inflation inched up to 4.40% led by higher gold prices but core inflation excluding gold, silver, petrol and diesel has moderated to 2.64% in October from 2.98% in September.”
“We expect a 25 bps rate cut from the RBI in December on the back of further downward revision in the CPI estimate for FY26.”
DEVENDRA PANT, CHIEF ECONOMIST, INDIA RATINGS AND RESEARCH, NEW DELHI
“Across the board strong deflationary conditions are not good for the Indian economy, especially from a fiscal point of view.”
“Despite global uncertainty from the tariff, economic growth has remained strong and 2QFY26 growth is expected to be 7.2%.”
“Based on the economic growth trend, the rationale for monetary easing is not very strong. FY26 retail inflation is now expected to be around 2.5%. However, to prevent the economy from slipping into sluggish and weak economic growth, the RBI may go for a 25-50bp cut in repo rate in its December 2025 monetary policy.”
RAJEEV SHARAN, HEAD-CRITERIA, MODEL DEVELOPMENT & RESEARCH, BRICKWORK RATINGS, BENGALURU
“Inflation has decelerated to the lowest level in the CPI series, reflecting the combined impact of GST reductions, favourable base effects, and broad-based easing across food and transport categories.”
“From a credit rating perspective, this disinflationary trend helps ease input cost pressures, supports corporate margins, and strengthens debt-servicing capacity. Having said that, prolonged disinflation could weigh on rural incomes and demand, posing challenges for monetary policy calibration and overall growth sustainability.”
ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURUGRAM
“The dip was largely driven by F&B segment, with the deflation in the same widening to 3.7% from 1.4% in the previous month. This accounted for as much as 116 bps of the 120 bps cooling in the headline inflation print between September 2025 and October 2025.”
“The CPI inflation is expected to witness a sustained uptick thereafter, likely crossing the 4.0% in Q1 FY2027, as the base turns adverse. The December 2025 MPC review remains a close call, in our view.”
KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU
“This print is largely due to a high statistical base effect and partly due to the impact of cut in GST rates on inflation as well as sharply lower food prices.”
“That said, we expect a major rebound in November inflation print, thanks to a significant base effect reversal. Even as inflation starts its upward journey, we expect average inflation for FY27 to remain below the RBI’s median target. We retain our expectation of one final rate cut of 25bps in the December meeting. “
SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI
“CPI’s historic dive! October is set to deliver a record low for 2012 CPI series at ~0.5%.”
“This near-deflationary climate, fuelled by base effects, low food prices and GST cuts, means the sub 1% reading may hold through November. But make no mistake: this is likely the absolute floor, the point from where the tide turns.”
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“Retail inflation came in line with expectations, softening largely due to food prices even as core inflation held steady at 4.4%.”
“Going forward, while the inflation trajectory is likely to remain benign, the RBI will need to filter festive and GST related demand from the cyclical recovery.”
“We remain sceptical on the sustainability of the recent pickup in economic activity and hence see some room for further monetary easing.”
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“Food disinflation deepened as high-frequency trends pointed to a correction in perishables, pulses, cereals and others. The disinflationary impulse from indirect tax relaxation is likely to become more apparent as changes took effect in late September.”
“Core inflation may stay firm on higher precious metals before easing in November. October will likely mark the bottom in this cycle, with base effects expected to see inflation resume its gradual climb in the coming months.”
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI
“CPI inflation came in at an all-time low, led by steep disinflation in food prices along with a benefit from a high base. We expect FY26 CPI inflation will significantly undershoot the RBI’s estimate of 2.6%, with FY26 CPI below 2%. This paves the way for a December 2025 rate cut by RBI and another 25 bps cut in Feb 2026.”
(Reporting by Reporting by Ira Dugal, Ananta Agarwal, Yagnoseni Das, Chandini Monappa, Aleef Jahan, Anuran Sadhu, Meenakshi Maidas, Manvi Pant, Kashish Tandon and Nishit Navin in Bengaluru, compiled by Abinaya Vijayaraghavan; Editing by Harikrishnan Nair)
