Retail Inflation Eases To 6.83 Per Cent In August, Yet Remains Above RBI's Tolerance Threshold

Data released by the government shows India's headline retail inflation rate for August stood at 6.83 per cent, Moneycontrol has reported.

This marks a notable decrease from July's 15-month high of 7.44 per cent, primarily attributed to a moderation in vegetable prices.

While the August Consumer Price Index (CPI) inflation figure represents a decline of 61 basis points compared to the previous month, it remains above the upper limit of the Reserve Bank of India's (RBI) tolerance range, which spans from 2 to 6 per cent.

This continues a trend, with inflation surpassing the RBI's medium-term target of 4 percent for the 47th consecutive month, the report adds.

It's worth noting that economists had anticipated a higher year-on-year inflation rate of around 7.0 per cent for August, making the actual figure a bit lower than expected.

The surge in vegetable prices was a significant factor contributing to July's elevated inflation rate of 7.44 per cent.

However, in August, there was a partial correction as vegetable prices declined, helping to ease the headline inflation rate.

Furthermore, food inflation also decreased in August, dropping to 9.94 per cent from July's 11.51 percent.

The Consumer Food Price Index recorded a 0.7 per cent month-on-month decrease, indicating a decline in price momentum within the food category. This decline in food inflation was primarily driven by a 5.9 per cent decrease in the vegetable price index compared to July.