India’s retail inflation accelerated in July, with the Consumer Price Index rising 4.45% y/y, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). The reading marked a renewed increase in price pressures after headline inflation stood at 4.38% in June, but the data came below the 4.5% forecast.
The July figure puts inflation above the Reserve Bank of India’s 4% medium-term target, although it remains comfortably within the central bank’s broader tolerance band of 2%-6%. The acceleration was largely associated with food prices, which continue to represent an important source of inflationary pressure for Indian households.
The Consumer Food Price Index (CFPI) showed food inflation rising to 5.52% y/y in July. The increase was particularly pronounced in rural areas, where food inflation reached 5.79%, compared with 5.05% in urban India. The headline rate has moved further above the Reserve Bank of India’s 4% inflation objective, but it’s unlikely to change RBI’s policy just yet.
This article was written by Giuseppe Dellamotta at investinglive.com.