India’s retail inflation surges to 7.44 per cent in July, breaches RBI’s tolerance limit, ETCFO


<p> India's retail inflation surges to 7.44 per cent in July, breaches RBI’s tolerance limit</p>
India’s retail inflation surges to 7.44 per cent in July, breaches RBI’s tolerance limit

Retail inflation, measured by consumer price index (CPI) surged to 7.44 per cent in July on an annual basis as against 4.81 per cent in June, showed data released by the National Statistical Office on Monday.

The CPI based inflation breached the upper limit of the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent after staying within for four consecutive months. This is the highest retail inflation since May 2022 when it was recorded at 7.79 per cent.

In July last year, the CPI inflation was at 6.71 per cent.

The rise in inflation was mainly due to a sharp jump in vegetable prices, especially tomatoes in the last month.

The consumer food price index (CFPI) rose to 11.51 per cent from 4.49 per cent in June. Rural inflation stood at 7.63 per cent while urban inflation stood at 7.20 per cent.

In its August Monetary Policy Committee (MPC) meeting, the RBI raised its inflation forecast for the current fiscal to 5.4 per cent from 5.1 per cent forecast in June policy.

The central bank said the rise in inflation would be due to soaring vegetable prices, which are expected to rise further in the next couple of months.

India’s wholesale inflation contracted 1.36 per cent on a year-on-year basis in the month of July after contracting 4.12 per cent in June, another data released on the same day showed . On a month-on-month basis, the index stood at 1.95 per cent.

  • Published On Aug 14, 2023 at 05:48 PM IST

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