Retail inflation increased to 5.49% in September due to bad weather and costlier vegetables. In August it was at 3.65% which is the highest in 9 months.
At the same time, the food inflation rate has increased from 5.66% to 9.24%. Urban inflation has also increased from 3.14% to 5.05% monthly. Rural inflation has increased from 4.16% to 5.87%.
Food inflation was 5.66% in September 2023, now it came to 9.24%
Food items contribute about 50% to the inflation basket. Its inflation has increased from 5.66% to 9.24% every month. Whereas a year ago, in August 2023, food inflation was 6.62%. It has also increased on an annual basis.
How does inflation affect?
Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then Rs 100 earned will be worth only Rs 94. Therefore, investment should be made keeping inflation in mind. Otherwise, the value of your money will reduce.
How do retail inflation and others change?
The change in inflation varies according to the demand and supply of the product. If people have more money they will buy more things. Buying more things will increase the demand and if the supply is not as per the demand, the price will increase.
In this way, the market becomes vulnerable to inflation. Simply put, an excessive flow of money in the market or a shortage of goods causes inflation. Whereas if demand is less and supply is more then inflation will be less.
Retail inflation and others are determined by the CPI
As a consumer, we purchase goods from the retail market. Accordingly, CPI (Consumer Price Index) shows the changes and related charges. CPI measures the average price we pay for goods and services.
Apart from crude oil, commodity prices, and manufactured costs, there are many other factors which play an important role in determining the retail inflation rate. There are about 300 items based on whose prices the retail inflation rate is decided.
