The retail inflation in India eased in July after hovering above the 6 per cent mark for two months in a row. This much-needed improvement was fuelled by improved supplies owing to the relaxations offered in pandemic restrictions.
In July 2021, the consumer prices rose 5.59%, significantly lower than the 6.26% annual inflation rate reported in June 2021, and also below a Reuters poll forecast of 5.78%, data released by the Ministry of Statistics on 12 August 2021 reflected.
Food prices, on the other hand, which account for nearly half of the inflation basket, rose 3.96% year-on-year in July 2021, up from the 5.15% reported a month earlier.
Read also: Lower food prices eases India’s July retail inflation
Also, the Reserve Bank of India (RBI) held its repo rate at a record low, last week. It, however, raised its inflation forecast amid signs of policymakers edging closer to a tapering pandemic-induced stimulus.
Union Finance Minister, Nirmala Sitharaman, however, downplayed these fears on 12 August 2021, telling industrialists that the economy is not so far reached the level the financial liquidity support offered to industries would get withdrawn.
She also claimed that the expected trajectory of inflation is likely to compel the RBI to normalise its policy towards the end of the ongoing fiscal year.
According to the numbers revealed by the government, retail fuel and electricity prices rose 12.38% in July, whereas transport costs jumped 10.54% as compared to a year ago. The prices of cereals, vegetables and sugar, however, cooled down during the same period.
The core inflation, excluding volatile food and fuel costs, stood between 5.94% and 6.1%, claimed some economists reacting to the numbers revealed, amounting to a noticeable decline when compared with the 6.1-6.2% core inflation rate pegged in June 2021.
Read also: Equity indices rise, investors eye retail inflation, IIP data
