Retail inflation in India soared to a 15-month high in July as food prices jumped sharply, hit by supply woes, posing a fresh challenge for authorities battling stubborn prices. Data released by the National Statistical Office (NSO) on Monday showed retail inflation as measured by the consumer price index (CPI) rose an annual 7.4% in July from the previous month’s 4.9%. This number is the highest since the 7.8% increase in April 2022.
The food price index moved into double digits at 11.5% from 4.6% in June. Rural inflation was higher at 7.6% in July while urban was at 7.2%. Vegetable prices rose an annual 37.3% during the month while pulses and its prices rose 13.3%. Cereals and its prices shot 13% in July while food and beverage prices rose 10.6%.
“Barring food and beverages, the inflation in all other groups eased in July 2023 vis-a-vis June 2023, offering some relief. Moreover, the core CPI (CPI excluding food and beverages, fuel and light and petrol and diesel) eased to a 21-month low of 5.1% in July 2023,” said Aditi Nayar, chief economist at ratings agency ICRA.
“The data for food prices for early August 2023 is not very promising, and we expect the headline CPI inflation to print above the 6.5% mark in August, before cooling off materially in September,” said Nayar.