Retail inflation eases to 6.83% in August amid falling food prices

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NEW DELHI: The retail inflation for August dipped to 6.83% from 7.44% in July owing to reduction in prices of vegetables, data released by government showed.
However, the inflation is still above the Reserve Bank of India’s comfort zone threshold of 6%.
In July, the inflation had skyrocketed after a sharp prices in prices of food, especially tomatoes, across the country.

According to data released for August, food inflation eased to 9.94 per cent in August from 11.51 per cent in July.
Notably, last year, the Consumer Price Index (CPI) based inflation was at 7.44 per cent in July and at 7 per cent in August.
The Reserve Bank of India (RBI) has projected the CPI inflation at 5.4 per cent for 2023-24.
Chief economist at Kotak Mahindra (Mumbai) Upasna Bhardwaj told Reuters that the figures for August are in line with the expectations.
“They are led largely by moderation in vegetable prices and easing core inflation. These figures should provide some breathing space to the MPC (monetary policy committee).”
“However, we continue to remain watchful on the cereals, pulses and rising oil prices. Overall, today’s readings reinforce our view of a prolonged policy-rate pause with a clear caution on any risks arising for generalised inflation,” she said
(With inputs from agencies)