Retail inflation inched up to a 10-month high of 3.21% in August mainly due to higher prices of food items like meat and fish, vegetables and pulses, government data showed on September 12.
However, retail inflation is still within the Reserve Bank’s target range, thus keeping hopes of another rate cut alive.
Inflation based on the Consumer Price Index (CPI) stood at 3.15% in July and 3.69% in August 2018. The previous high was 3.38% in October 2018.
Inflation in the food basket was 2.99%, up from 2.36% in July.
The August data released by the National Statistics Office in the Ministry of Statistics and Programme Implementation also provided details of inflation in segments like ‘health’, ‘recreation and amusement’ and ‘personal care and effects’. The retail inflation in health was 7.84%, recreation and amusement 5.54% and personal care and effects 6.38%.
Price rise in the ‘education’ segment was recorded at 6.10% in August.
Inflation in meat and fish basket was 8.51%, pulses and products 6.94% and vegetables 6.9%.
The RBI, which mainly factors in CPI for arriving at its bi-monthly monetary policy, has been mandated by the government to ensure that inflation remains at 4%, with deviation of 2% on either side. The central bank, which has already reduced the key policy rate four times in the current calendar year, is scheduled to announce its next bi-monthly monetary policy on October 4.
The data also revealed that highest rate of inflation was witnessed in Assam at 5.79%, followed by Karnataka (5.47%) and Uttrakhand (5.28%). Interestingly, inflation was in the negative zone at minus 0.42% in Chandigarh.
Inflation in rural areas of the country was at 2.18% and 4.49% in the urban areas in August.