India witnessed a 15-month high in retail inflation, reaching 7.44%, surpassing the tolerance threshold set by the Reserve Bank of India (RBI).
August 14, 2023
CPI July
Retail inflation, measured by the consumer price index, surged to a 15-month peak of 7.44% in July from 4.87% in the previous month. This rise was driven by higher food prices, particularly vegetables. Consumer food price index inflation rose sharply to 11.51%, and food and beverage inflation jumped to 10.57%.
Vegetable prices at the retail level skyrocketed to 37.34% from -0.93% in June. Prices of various food items like cereals (13.04%), meat and fish (2.25%), fruits (3.16%), pulses (13.27%), and sugar (3.75%) increased in
July. Core inflation for July was lower at 4.9%, while wholesale inflation remained negative at -1.36% compared to 4.12% in June. Wholesale primary articles inflation reached a 116-month high of 7.57%, with food articles inflation at 14.25%.
In the August Monetary Policy Committee meeting, the RBI raised its inflation forecast for the fiscal year to 5.4% from 5.1% in June. RBI Governor Shaktikanta Das stressed the need for readiness to use policy tools if needed during the August meeting.
IIP June
In June, the Index of Industrial Production (IIP) expanded at a pace slower than anticipated. The IIP recorded a growth of 3.7% in June, compared to a revised figure of 5.3% in May. Data released by the Ministry of
Statistics and Programme Implementation revealed that the manufacturing sector’s output experienced a 3.1% increase in June 2023. Mining output saw a rise of 7.6% during the same period, while power output exhibited a growth of 4.2% in June 2023.