August retail inflation drops to 6.83% on lower food costs
India's retail inflation rate in August dropped to 6.83%, down from 7.44% in July, according to data released by the National Statistical Office (NSO). The decline is attributed to a cooling of vegetable prices compared to the previous month. Food inflation, which constitutes nearly half of the overall inflation basket, eased to 9.94% in August from 11.51% in July.
RBI's inflation target exceeds 4th time in 2023
In 2023, the retail inflation rate, measured by the consumer price index (CPI), has exceeded the upper limit of the RBI's target range of 4% with a tolerance band of +/- 2% for the fourth time. Since July 2022, this has occurred seven times. The RBI primarily considers retail inflation when determining the benchmark interest rate, known as the repo rate.
Industrial production surges 5.7% in July
India's Index of Industrial Production (IIP) grew at a rate of 5.7% in July, up from 3.8% in June, surpassing expectations of 5%. The IIP measures the growth of various sectors in the Indian economy, including manufacturing, mining, and electricity. This growth in IIP is a positive sign for the Indian economy, indicating an increase in industrial activity. India's urban CPI slowed to 6.59% from 7.20% in July, while rural inflation fell to 7.02% from 7.63% a month ago.
Price data collection by NSO
The National Statistical Office (NSO) gathered price data from 1,114 urban markets and 1,181 villages in all states/union territories. Field staff from NSO visited these locations on a weekly basis. During that month, they successfully collected prices from nearly all villages (99.6%) and most urban markets (98.3%). However, the completeness of market-specific price reporting was slightly lower, with 88.8% coverage for rural areas and 91.3% for urban areas.
