Retail inflation slows to 6.83% as vegetable prices decline
NEW DELHI : Retail inflation moderated to 6.83% in August from a 15-month high of 7.44% in July due to easing vegetable prices, offering a measure of relief to the Indian central bank and bond investors. Consumer Price Index (CPI)-based inflation, however, continued to exceed the Reserve Bank of India’s (RBI’s) target range of 2-6%. A Mint poll of 18 economists estimated retail inflation to slow to 7% in August.
Food inflation, measured by the Consumer Food Price Index, which accounts for nearly half of the overall consumer price basket, slowed to 9.94% in August from 11.51% in July, according to data released by the ministry of statistics and programme implementation (MoSPI) on Tuesday. The cooling of inflation was led by vegetables amid some moderation in prices of clothing and footwear, housing and miscellaneous items. “Within food items, inflation in vegetables fell to 26.1% in August 2023 from 37.4% in the previous month, contributing as much as 28 basis points (bps) of the 61bps decline in the headline CPI inflation print between these months.
Notably, the year-on-year (y-o-y) inflation prints in seven of the 12 food segments in the food and beverages index witnessed an uptick in their y-o-y print in August," said Aditi Nayar, chief economist at Icra Ltd. One bps is one hundredth of one percentage point. However, economists are closely monitoring the prices of cereals, pulses and oil.
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