Noida, Sep 14 (APAC Media): India’s retail inflation rose to 4.82 per cent in August, from 4.45 per cent in July, as food prices picked up and pushed consumer price pressures higher, according to government data released on Monday.
The August inflation print was slightly above the 4.80 per cent median estimate in a Reuters poll of economists. It also moved further above the Reserve Bank of India’s medium-term target of 4 per cent, though it remained within the central bank’s permitted 2-6 per cent tolerance range.
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The main pressure came from food prices. Food inflation, measured by the Consumer Food Price Index (CFPI), increased to 5.95 per cent in August from 5.52 per cent in July.
Rural areas recorded food inflation of 6.13 per cent, while the corresponding figure for urban consumers stood at 5.64 per cent, highlighting the continued pressure on household food budgets.
Prices of several vegetables and spices rose sharply during the month. Ginger inflation surged 73.82 per cent year-on-year, while onion prices increased 48.27 per cent and garlic prices rose 43.60 per cent.
Not all food items, however, became more expensive. Tomato prices fell 31.09 per cent from a year earlier, while potato prices declined 13.14 per cent.
Transport inflation rose to 4.60 per cent in August from 4.43 per cent in July, while inflation in restaurants and accommodation services reached 8.38 per cent.
“With the prices of key staple food items rising sharply, cost pressures across the food and beverage value chain are set to intensify. The impact is likely to be felt across food processing, restaurants and allied food services, as higher input costs could put pressure on operating margins and consumer prices. The elevated food inflation, particularly in rural India, warrants close attention to ensure that rising input costs do not further strain household budgets and the broader consumption environment,” said Mr. Rajeev Juneja, President, PHDCCI.
Economists said the latest numbers could make the inflation outlook more challenging for monetary policymakers.
Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, said, “We see scope for 50-75 basis points of rate hikes,” adding that the chances of action at the RBI’s October policy meeting were “increasing significantly.”
The RBI had kept its benchmark policy rate unchanged at 5.25 per cent at its previous meeting. A sustained increase in food and broader inflation could therefore complicate the central bank’s policy calculations.
State-level data also showed wide differences in price pressures. Telangana recorded the highest retail inflation among states with populations above five million at 6.27 per cent, followed by Tamil Nadu at 5.92 per cent and Madhya Pradesh at 5.55 per cent.
The latest data will be closely watched by policymakers as they assess whether the August increase represents a temporary rise driven largely by food prices or signals a broader and more persistent inflation trend.
For households, however, the impact is immediate, particularly as essential food items such as onions, garlic and ginger continue to command significantly higher prices than a year ago.
–ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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