Retail Inflation in August 2023: There has been news of relief on the inflation front in the month of August. After the fall in vegetable prices, inflation has reduced across the country. Due to softening of vegetable prices, retail inflation has come down to 6.83 percent in August. However, it is still above the satisfactory level of the Reserve Bank of India. At the same time, in the month of July, retail inflation had reached a 15-month high of 7.44 percent.
NSO released data
According to the data released by the National Statistical Office (NSO), food inflation stood at 9.94 percent in the month of August, which was 11.51 percent in the previous month in July.
Inflation has to be brought down to 4 percent
Inflation based on Consumer Price Index was seven percent in August last year. Although retail inflation has moderated last month, it is still above the RBI’s satisfactory range. The Central Bank has the responsibility of keeping the inflation rate at four percent with a variation of two percent.
Everything from oil to food items became cheaper.
According to the data, inflation of vegetables moderated to 26.14 percent in the month under review, which was 37.4 percent in July. Inflation of oil and fat products declined to 15.28 percent. At the same time, inflation in meat and fish, eggs, sugar and ‘confectionery (biscuits, chocolates etc.), non-alcoholic beverages, fruits and ready meals and ‘snacks’ (namkeen, chips etc.) has remained low on an annual basis. According to the data, inflation in the housing segment has been 4.38 percent and that in the fuel and light segment has been 4.31 percent.
Vegetable prices fell
Aditi Nair, chief economist and research head of rating agency ICRA, said that inflation in vegetables among food items has come down to 26.1 percent, which was 37.4 percent last month. Their contribution to the 0.61 percent decline in retail inflation during this period was 0.28 percent. He has said that the main (core) inflation (removing the prices of food, beverages and fuel from retail inflation) declined marginally to 5.06 percent in the month of August this year, which was 5.12 percent in the previous month. This is the third month when it has decreased.
RBI estimates 5.4 percent
RBI has estimated inflation to be 5.4 percent in the current financial year. It is expected to be 6.2 percent in the second quarter, 5.7 percent in the third quarter and 5.2 percent in the fourth quarter. Inflation was estimated to be 5.2 percent in the first quarter. It is noteworthy that retail inflation had moderated to 4.8 percent in June 2023, which had reached a high of 7.8 percent in April last year. However, it increased to 7.4 percent in July mainly due to increase in the prices of vegetables.