India’s CPI-based retail inflation increased to 4.45% in July from 4.38% in June.
Food inflation also climbed to 5.52%, according to government data.
Highlights
- Retail inflation increased to 4.45% in July.
- CPI inflation stood at 4.38% in June.
- Food inflation rose to 5.52% in July.
- Food inflation was 5.32% in the previous month.
- The data was released by the National Statistics Office (NSO).
- RBI’s inflation target is 4%, with a tolerance band of 2% on either side.
New Delhi, Aug 12: India’s retail inflation edged higher to 4.45% in July, mainly due to an increase in food prices, according to government data released on Wednesday.
Inflation measured by the Consumer Price Index (CPI) stood at 4.38% in June. The latest numbers therefore show a moderate increase in overall price pressures during July.
Food prices were among the major factors behind the rise. Food inflation increased to 5.52% in July from 5.32% in the preceding month, according to CPI data released by the National Statistics Office (NSO).
The increase in food inflation is significant because movements in food prices have a direct impact on household expenses and play an important role in determining the overall CPI inflation rate.
The latest inflation reading also remains important for the Reserve Bank of India’s monetary policy decisions. The central bank has been tasked with keeping CPI inflation at 4%, with a tolerance margin of 2 percentage points on either side.
At 4.45%, July’s retail inflation remained within the RBI’s prescribed tolerance band but was above its 4% target.
The RBI had kept its short-term lending rate unchanged, according to the information provided. Future inflation trends, particularly movements in food prices, will remain an important factor for monetary policy.
The July numbers indicate that while headline inflation recorded only a marginal increase from June, food inflation continued to remain higher than the overall retail inflation rate.
