High food and vegetable prices kept India’s retail inflation close to worrisome double-digit levels, adding to an array of problems for the government that is battling to pull the economy out of a crippling industrial slowdown and sharply sliding rupee in an election year.
India’s retail inflation measured by the consumer price index (CPI) — a more realistic gauge as it captures shop-end prices — stood at 9.52% in August marginally lower than 9.64% in the previous month, latest official data showed.
All eyes will be on the wholesale price index (WPI)-based inflation data for August which the government will release on Friday.
The two sets of price data together with the factory output data for July will likely set the tone for Reserve Bank of India governor Raghuram G Rajan who will present his maiden credit policy next week.
Retail inflation eased slightly to 9.52% in August over the previous month following softening in prices of almost all commodities, except vegetables.
The CPI inflation, despite some signs of softening since March, has remained stubbornly above 9% as everything—from food items to cosmetics—have become costlier, partly stoked by a falling rupee.
Retail vegetable prices grew 26.48% during August resulting in a costly platter for households.