India’s consumer-based price index, or retail inflation in July surged to a 15-month high of 7.44% YoY from 4.87% in June, the National Statistical Office (NSO) said in a release on Monday.
With the consumer price index rising to 7.44% in July, retail inflation breached the upper limit of the RBI’s tolerance band of 2-6% for the first time in five months.
Inflation in consumer food price index inflation rose to 11.51% in July while inflation in the food and beverages basket jumped to 10.57%. Retail inflation in vegetables surged to 37.34% last month from a deflation of -0.93% in June.
Prices at the retail level of a number of food items, including cereals and products (13.04%), meat and fish (2.25%), fruits (3.16%), pulses (13.27%) and sugar and confectionary (3.75%), rose in July compared to June.
“Going forward, the spike in vegetable prices, led by tomatoes, would exert sizeable upside pressures on the near-term headline inflation trajectory. This jump is, however, likely to correct with fresh market arrivals. There has been significant improvement in the progress of the monsoon and kharif sowing in July; however, the impact of the uneven rainfall distribution warrants careful monitoring,” said the Monetary Policy Committee (MPC) of the RBI had said after its meeting on August 8-10.
