Retail inflation, measured by the Consumer Price Index that 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 corporate investment activity was still muted to suggest a definitive rebound in the economy, and a lot would depend on rise in rural incomes driven by a 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,” credit rating agency Crisil said in a research report.