India’s retail inflation accelerates to 2.36% in July on higher food prices

16 Aug 2017 Evaluate

After hitting a record low in June, India’s retail inflation jumped to 2.36% in the month of July 2017, on the back of hardening of prices in sugar and confectionery items, pan, tobacco and intoxicants. But, on a year-on-year basis, it was lower than the 6.07% CPI rate reported for the corresponding month of last year. Also, the retail inflation remained within the lower end of the central bank’s forecast range of 2-3.5% for the first half of the current fiscal. Besides, the consumer price index (CPI) for the month of June was revised downwards to 1.46%.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the Consumer Price Index (CPI) (Rural, Urban, Combined) on Base 2012=100 for July 2017, stood at 2.41%, 2.17% and 2.36% respectively, compared to at 6.66%, 5.39% and 6.07% respectively in July 2016. The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for July 2017 stood at 0.07%, (-) 0.99% and (-) 0.29%, respectively, compared to 8.18%, 8.80% and 8.35% respectively in July 2016. The index value of CFPI for combined stood at 138.4 for the month of July 2017.

According to the data, the price of sugar and confectionery items went up by 8.27% in July, while pan, tobacco and intoxicants turned dearer by 6.39%. Housing expenses saw a price increase of 4.98%, while that of the fuel and light segment was up by 4.86%. Retail price of clothing and footware items also increased 4.22%. On the other hand, the major contraction in price was witnessed in pulses and products at (-) 24.75%, followed by vegetables (-) 3.57%, eggs (-) 2.04% and spices (-) 1.67%.