MUMBAI, Aug. 13 (Xinhua) -- India’s retail inflation rose to 6.93 percent in July led by higher food prices, according to the data shared by Ministry of Statistics and Program Implementation Thursday.
In June, the retail inflation was revised to 6.23 percent while the government had not released the data for April and May.
The rise in retail inflation was primarily due to pulses and products prices surging by 15.92 per cent on year during the month under review on-year rise in July. Fish and meat segment too surged by 18.8 percent while spices and vegetable prices grew by 13.27 ad 11.29 percent, respectively.
The overall retail inflation for July continues to be outside the comfort zone of India’s Central Bank, which had set an inflation target of 4 percent with a variation of 2 percent on either side.
Food inflation was expected to stay elevated due to supply chain disruptions on account of COVID-19 (vegetables and protein-based) alongside sticky non-food pressures due to higher fuel taxes, said Radhika Rao, economist with Singapore-based DBS Bank.
High core inflation and strong supply-side disruptions certainly question the dominant wisdom that a deep economic shock carry disinflationary tendencies. Moreover, above-target inflation vindicates the Indian Central Bank’s policy committee’s decision to keep rates on hold this month and likely to be maintained at least until late year, Rao said.
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