Retail inflation measured by the consumer price index (CPI), which captures shop-end prices, stood at 9.52% in August from 9.64% in July, but food inflation stood at a worrisome 11.06% driven by costly vegetables, data released on Thursday showed.
Expectedly, the government, battling to pull the economy out of a crippling slowdown, cheered the data.
“It's good news. I believe the phase of negative growth is coming to an end," said C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council.
Experts, however, said that corporate investment activity was still muted to suggest a definitive rebound in the economy, and a lot will depend on rise in rural incomes driven by normal monsoon.
“While a normal monsoon and consequent pick-up in rural incomes could push up consumption growth, a sustained revival of the manufacturing sector will be contingent on a pick-up in corporate investments,” Crisil, a credit rating agency said in research report.