Just as the prices of vegetables are skyrocketing and the prices of pulses have reduced the bread from the common man’s plate, in the same way the fear of the rapid rise in house prices has also increased. This is because food inflation has reached double digits in October.
According to the data, food inflation reached 10.87 percent in October, which was 9.24 percent in September. Due to this, the retail inflation rate increased to 6.21 percent last month, which is the highest level in 14 months. Interestingly, non-food inflation has been only around 3 percent. Inflation of vegetables plays the biggest role in increasing food inflation. according to statistics
The inflation rate of vegetables in October was 42.2 percent. Which is the highest level in the last 57 months. The prices of onion, tomato and edible oil have gone out of control. Its impact is being felt from kitchen to real estate.
Actually, this is not just a figure but it is an indication that if inflation continues to rise in the coming months, then those waiting for reduction in EMI may get a shock. It is now clear that RBI will not cut the repo rate in December. In a recent SBI report, it was estimated that the repo rate, which will be fixed at 6.50 from February 2023, may be reduced in February next year i.e. after 2 years. In this too, SBI Research has expressed a reduction of only one-fourth percent.
There is no expectation of reduction in repo rate in December because due to global factors and tensions in West Asia, crude prices are currently around $72 per barrel. In such a situation, the EMI will not reduce soon and there are chances of repo rate cut only in February next year or after that.
It is clear that food inflation is increasing household inflation expectations. That is, when the household budget gets exhausted in the kitchen, then how will people fulfill their dream of buying a new house? This storm of inflation is weighing heavily on the real estate market, due to which there is a possibility of weakening of housing demand because in the current situation it is difficult for people to take the decision of buying a house. If inflation is not controlled, our food will become more expensive every day, due to which people will have less money for other expenses and the possibility of slowdown in the economy will increase.