India's retail inflation stands at 6.69% in August

Retail inflation softened slightly to 6.69 per cent in August, even as food prices continued to rule high, official data showed on Monday.

The government has revised downwards the retail inflation for July to 6.73 per cent from the earlier estimate of 6.93 per cent. Food inflation during the month stood at 9.62 per cent.

Food inflation in August fell marginally to 9.05 per cent, according to the Consumer Price Index (CPI) data.

The retail inflation, mainly taken into account by the RBI to arrive at its policy decisions, has been above the regulator's comfort level.

The government has mandated the central bank to restrict the inflation at 4 per cent (+/- 2 per cent).

India's wholesale inflation rose to 0.16% in August from (-)0.58% in July on higher prices of vegetables and manufactured products, data released today by the commerce and industry ministry showed.

This is the first time in five months that WPI inflation has stepped out of the negative territory. Wholesale prices went into deflation in April after almost four years following the imposition of the nationwide lockdown to curb the COVID-19 pandemic.

WPI inflation was 1.17% in August 2019. The WPI inflation print for August is above the consensus estimate. According to the median of a Cogencis poll, wholesale inflation was seen at (-)0.3%. The food articles index rose 0.9% month-on-month in August on account of a 1.5% rise in the vegetable index. Food inflation edged down slightly to 4.07% from 4.32% the previous month. Further upward pressure came from the fuel and power index of the WPI, which increased 0.8% month-on-month.

Prices of manufactured products, which account for nearly two-thirds of the weight of the WPI, rose on an annual basis for the third consecutive month. Manufactured products inflation in August rose to 1.27%, with the index rising 0.6% from July.

While WPI inflation rose in August, CPI inflation is seen largely unchanged. According to a Cogencis poll, CPI inflation is seen at 6.9% in August. In July, retail inflation had come in at 6.93%.

(With inputs from Agencies)

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