Retail inflation falls to 3-month low in July, IIP at 13.6% in June
Decline in retail inflation
- Retail inflation eased to 5.59 per cent in July.
- Retail inflation stood at 6.2 per cent in June.
- It has come down below 6 per cent for the first time in three months.
New Delhi: India’s retail inflation eased to 5.59 per cent in July, back within the Monetary Policy Committee’s inflation target of 4 (+/- 2) per cent, government data on softening food prices Seen. It was 6.2 per cent in June. This is the first time in three months that CPI data has fallen below the Reserve Bank of India’s (RBI) upper margin of 6 per cent. Prior to this, the CPI had come above 6 per cent for two consecutive months. Food inflation declined to 3.96 per cent in July from 5.15 per cent in June, data from the National Statistical Office showed on August 12.
The Reserve Bank of India, in its monetary policy review released earlier this month, projected CPI inflation at 5.7 per cent in 2021-22. According to RBI, inflation is expected to be 5.9% in Q2, 5.3% in Q3 and 5.8% in Q4 with risk to volatility. It is estimated to be 5.1% in the first quarter of the next financial year 2022-23. The RBI is entrusted with the responsibility of keeping the inflation rate at 4 percent with a variation of 2 percent up and down. The central bank mainly looks at the CPI inflation rate at the time of bi-monthly monetary policy review.
CPI data is mainly factored in by the RBI while formulating its bi-monthly monetary policy. Last week, the central bank’s Monetary Policy Committee (MPC) kept the repo rate unchanged at 4 per cent for the 7th time in a row while maintaining an ‘accommodative stance’.
Factory output, as measured by the Index of Industrial Production (IIP), grew 13.6 percent in the same month last year and 29.3 percent in May.
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