Kerala’s retail inflation remains highest in India for 9th straight month, even as national rate dips

Even as India’s retail inflation eased to an eight-year low in September, Kerala stood out as the state with the highest inflation rate for the ninth consecutive month. Inflation in the state remained above the 9 per cent mark at 9.05 per cent.

Rural inflation in the state was pegged at 9.94 per cent, while urban inflation stood at 7.39 per cent — both the highest among all states and union territories, according to government data released on Monday.

In comparison, Kerala’s inflation rate was 8.89 per cent in July and 9.04 per cent in August, indicating sustained price pressure in the state. Experts attribute this trend to Kerala’s consumer-driven economy, which makes it more vulnerable to price increases in essential goods and services.

Jammu and Kashmir ranked second with 4.38 per cent, followed by Karnataka with 3.33 per cent and Punjab (3.06 per cent). On the other hand, Uttar Pradesh recorded the lowest inflation in September at –0.61 per cent, followed by Assam (–0.56 per cent) and Bihar (–0.51 per cent).

Meanwhile, the consumer price index-based inflation dipped to the lowest in the country in eight years to 1.54 per cent due to the subdued prices of vegetables, fruits and pulses. This rate is in line with the Reserve Bank of India's expectation, which aims to keep the rate within a 2 to 4 per cent range. 

The inflation rate was 2.07 per cent in August and 5.49 per cent in September 2024. The previous low was 1.46 per cent in June 2017. Rural inflation in the country stood at 1.07 per cent, while the urban rate was 2.04 per cent. 

Year-on-year food inflation during September 2025 was -2.28 per cent compared to -0.64 per cent in August. "A decrease of 164 basis points is observed in food inflation in September 2025 in comparison to August 2025. The food inflation in September 2025 is the lowest after December 2018," the Ministry of Statistics and Programme Implementation said. 

In its October bimonthly monetary policy, the Reserve Bank lowered its inflation projection for 2025-26 to 2.6 per cent from 3.1 per cent estimated in August. Regarding the inflation outlook for second half of the fiscal, RBI said that healthy progress of the south-west monsoon, higher kharif sowing, adequate reservoir levels and comfortable buffer stock of foodgrains should keep food prices benign.