At 7.44%, India's retail inflation reaches 15-month high
In July, India's retail inflation rate skyrocketed to a 15-month record of 7.44% YoY. It is a significant increase from June's 4.87%. This surge exceeded the Reserve Bank of India's (RBI) comfort zone of 2-6% and marked the end of four consecutive months within the target range. In May 2023, retail inflation was at a two-year low of 4.25%.
Vegetable prices increased by 37.43% YoY
The primary driver behind this inflation spike in July was a sharp rise in tomato and other vegetable prices, resulting from a shortage during the monsoon season. Consequently, the consumer food price index (CFPI) reached 11.51% in July, compared to 4.49% in June and 6.69% in July 2022. The year-on-year price increase for vegetables was a staggering 37.43%.
Urban and rural inflation increased in July
The rate of price growth for cereals and related products also escalated, hitting 13%. Meanwhile, rural inflation in the country increased to 7.63%, up from 4.78% last year. Urban inflation surged to 7.2% from 4.96% last month. The data released by the National Statistical Office (NSO) underscores the challenges faced by the central bank in managing inflation while ensuring economic stability.
