India witnessed a 15-month high in retail inflation, reaching 7.44%, surpassing the tolerance threshold set by the Reserve Bank of India (RBI).
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
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.
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.