Lower food prices bring inflation to 5.3% in Aug
Cooling of retail inflation for 3rd mth in a row
image for illustrative purpose
New Delhi: Subdued prices of food items like vegetables pulled down retail inflation for the third month in a row to 5.3 per cent in August, within the RBI's comfort zone. While the Consumer Price Index (CPI)-based retail inflation declined to 5.3 per cent in August from 6.69 per cent in the same month a year ago, food inflation dipped at a much faster pace to 3.11 per cent from 9.05 per cent in August 2020.
The food inflation was also lower than 3.96 per cent in preceding month of July. Retail inflation, which rose sharply to 6.3 per cent in May from 4.23 per cent in April, has been on a downward trajectory since then. It was 6.26 per cent in June and 5.59 per cent in July this year.
The Reserve Bank, which mainly takes into account retail inflation to decide the monetary policy every two months, has been tasked by the government to keep it at 4 per cent, with a tolerance band of 2 per cent on either side. As per the data released by the National Statistical Office (NSO) on Monday, inflation in 'vegetables' and 'cereals and products' contracted by 11.68 per cent and 1.42 per cent, respectively. However, the rate of price rise was 33 per cent in the 'oils and fats' segment in August 2021 over the year-ago month.
