Retail inflation jumps to 3.36% in August

13 Sep 2017 Evaluate

The Consumer Price Index (CPI) or retail inflation jumped to five month high of 3.36% in the month of August 2017, mainly due to an increase in foods prices and higher services costs, indicating Goods and Services Tax’s (GST’s) inflationary impact. But, on a year-on-year basis, it was lower than the 5.05% CPI rate reported for the corresponding month of last year. However, the rate is still below/above the Reserve Bank of India's (RBI) medium-term target of 4%.

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 August 2017, stood at 3.30%, 3.35% and 3.36% respectively, compared to at 5.87%, 4.22% and 5.05% respectively in August 2016. The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for August 2017 stood at 1.38%, 1.67% and 1.52%, respectively, compared to 6.32%, 5.10% and 5.91% respectively in August 2016. The index value of CFPI for combined stood at 140.1 for the month of August.

According to the data, Consumer food price inflation, a metric to gauge changes in monthly kitchen costs, continued to remain soft, with prices showing gradual improvement at 1.52% from (-) 0.36% in July as compared with 5.91% in the same period last year. Vegetable prices witnessed a growth of 6.16% in August as compared with (-) 3.57% in July. Prices of pulses though fell 24.43 percent, as compared with (-) 24.75 in July. Housing inflation grew 5.58% in August from 4.98% in July. Fuel inflation was 4.94% in August, as compared with 4.84% in July. Pan, tobacco and intoxicants rose 6.85% in August.