Retail Inflation: Shock on inflation front, retail inflation rose to 15-month high of 7.44% in July

India’s retail inflation rose sharply to a nine-month high of 7.44 per cent in July, according to official data. This shows a significant increase as compared to 4.81 per cent recorded in June. Consumer Price Index-based inflation was widely expected by economists to be above the Reserve Bank of India’s upper tolerance limit of 6 percent. However, the actual figure is higher than most experts estimate. The rise in retail inflation comes in the wake of a sharp rise in prices of vegetables as well as an equally sharp rise in prices of cereals such as rice and wheat over the past few months.

Significantly, the retail inflation or consumer price index of Rat was 4.81 percent in June. The consumer price index (CPI) rose for the first time in five months to 4.81 per cent in May from 4.31 per cent on the back of a jump in vegetable prices. India’s industrial production grew 5.2 percent in May from 19.7 percent a year earlier, according to government data. The retail inflation rate in the country came down to 4.25% in May. This was the lowest level of inflation in 25 months. Inflation in April 2021 was 4.23%. This decrease in inflation was due to the fall in the prices of food items. Earlier in April 2023, the retail inflation rate was 4.70%.

Inflation in food articles stood at 14.25 per cent in July, as against 1.32 per cent in June, according to government data. The Ministry of Commerce and Industry said that the decline in the rate of inflation in July, 2023 is mainly due to a decrease in the prices of mineral oils, basic metals, chemicals and chemical products, textiles and food products.