INDIA'S INFLATION PLUMMETS TO RECORD LOW! Food prices crash, taxes slashed - HUGE relief for shoppers!

Retail inflation in India reached an unprecedented low of 0.25% in October, a significant drop from the revised 1.44% recorded in September. This cooling is largely attributed to a substantial decrease in food prices and the complete impact of recent Goods and Services Tax (GST) rate reductions implemented in late September. The government had lowered GST on hundreds of mass-consumption items, including dairy products and personal care goods, to stimulate domestic demand. Food inflation saw a steep decline of 5.02% year-on-year, with vegetable prices plummeting by 27.57%. Economists believe this disinflationary trend will ease pressure on household budgets and could support continued policy measures aimed at sustaining economic growth. However, they will closely monitor global price volatility and domestic demand during the festive season.

**Terms Explained:** Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in a predetermined basket of goods and services and averaging them. Goods and Services Tax (GST): A comprehensive indirect tax levied on the supply of goods and services, applicable throughout India. The government periodically revises GST rates on various items.

**Impact** This news is highly impactful for the Indian economy. The sharp drop in inflation suggests increased purchasing power for consumers, potentially boosting demand for goods and services. It also provides the central bank room to maintain accommodative monetary policies, which can further support economic growth. However, sustained global price volatility could pose challenges. Impact Rating: 8/10