Retail inflation cools in August at 6.83%, but stays above target
Consumer inflation rose at a slower pace in August, compared to July’s 7.44%, which was a 15-month high
NEW DELHI: Retail inflation slowed in August to stand at 6.83% from a year ago but continued to be above the Reserve Bank of India’s target of 4% (+/-2), official data released on Tuesday showed.
Consumer inflation rose at a slower pace in August, compared to July’s 7.44%, which was a 15-month high, mainly on the back of easing prices of edible oil and a marginal decline in vegetable inflation.
The combined food price index eased to 9.94% in August from a year ago, compared to a rise of 11.51% in the previous month, the data showed.
Consumer price inflation exceeded the central bank’s target range for the second straight month, driven by a sharp spike in tomato and vegetable prices.
Cereal prices remained in double digits and rose 11.6% in August as compared with 13% in July. Milk and milk products inflation came in at 7.7% as compared to a rise of 8.34% in the previous month.
Vegetable prices, still high, rose 26.1% against a staggering 37.34% rise in July, while prices of oils and fats declined by 15.3% after dropping by 16.8% in the previous month.
Battling high prices, the government has regulated trade in most food items to cool consumer inflation. India has banned rice and wheat shipments abroad, levied a 40% duty on onion export and allowed duty-free imports of pulses. Analysts expect inflation to cool in September when new harvests will hit the markets.