NEW DELHI- India’s annual retail inflation in July rose to its highest in 15 months as vegetable and cereals prices skyrocketed, beating all market expectations and putting pressure on the government to take action to bring down prices.
India’s annual retail inflation rose sharply to 7.44 percent in July from 4.87 percent the previous month. A Reuters poll of 53 economists had forecast a rate of 6.40 percent . The figure was the highest since April 2022.
The figures breached the upper end of the central bank’s inflation band of 2 percent -6 percent for the first time in five months.
“The spurt in CPI inflation in July 2023 was on expected lines, however, 7.44 percent retail inflation was totally unexpected,” said Devendra Pant, economist at India Ratings.
Food inflation, which accounts for nearly half of the overall consumer price basket, hit a staggering 11.51 percent in June as compared with 4.49 percent in June. Retail food inflation was at its highest since January 2020.
Last week, the Reserve Bank of India (RBI) raised its inflation forecast for the current financial year to 5.4 percent from 5.1 percent earlier, citing food prices.
Vegetable inflation rose by a whopping 37.34 percent after a fall of 1 percent in the previous month. Prices of some of the most used vegetables in Indian kitchens, including tomatoes, onions, peas, brinjal, garlic and ginger, have more than doubled in the last few months.
