Retail Inflation in August: Inflation rate lowest for the second time in 5 years, these food items became cheaper

The Labour Department of the Finance Ministry has released the annual inflation rate for the month of August. According to the report of the Labour Department, there has been a slight increase in the retail inflation rate in August. But this inflation has been the lowest for the second time in five years. In August, India’s retail inflation has increased marginally to 3.65 percent annually, whereas five years ago it was 3.54 percent annually.

According to the data, food inflation accounts for half of the CPI. Last month, food inflation was at a 13-month low of 5.42 percent. Now this month, there has been a slight increase in it.

With this announcement, the core inflation rate has remained within the Reserve Bank of India’s (RBI) range of 2-6 percent. However, it is still far from the RBI’s target of “sustainable 4 percent”, as stated by central bank governor Shaktikanta Das. A weak rupee, along with risks related to the monsoon, are expected to keep inflation pressures elevated in the near term.

What was the economist’s estimate?
A Reuters poll of 53 economists forecast consumer price inflation to come in at 3.50 percent for August, slightly lower than the 3.54 percent of the previous month. Forecasts for the official data ranged from 3.10 percent to 4.91 percent.

Which items are cheap?
The inflation rate of vegetables increased by 10.71 percent in August, while it was 6.83 percent in the previous month. That is, the price of vegetables has increased. The reason for this may be concern about irregular monsoon rains, which can affect crop yield and increase prices in the future.

The inflation rate for pulses and cereals was 13 percent and 7.31 percent. The inflation rate for fruits was 6.45 percent. The inflation rate for milk and milk products was 2.98 percent in August. The prices of these items have come down. The inflation rate for meat and fish, egg segments was recorded at 4.30 percent and 7.14 percent.

Fuel inflation rate: Fuel and energy inflation for August stood at (-)5.31 per cent as against (-)3.66 per cent in July. While inflation for other clothing and footwear and housing sectors was 2.72 per cent and 2.66 per cent respectively.