Retail inflation surges to 8-month high of 4.8% in August
India's retail inflation reached an eight-month high of 4.8% in August, driven primarily by rising food prices. Economists suggest that sustained inflationary pressure could influence the Reserve Bank of India to consider interest rate hikes in upcoming meetings.
Why it matters
Rising inflation impacts consumer purchasing power and forces central banks to make difficult decisions regarding monetary policy and economic growth.
NEW DELHI: Retail inflation based on the consumer price index (CPI) hit an eight-month high of 4.8% (y-o-y) in Aug from 4.5% in July, driven largely by higher food prices, NSO (National Statistics Office) data released Monday showed.At current level it is above RBI's 4% target for the third consecutive month, although it remains within the 2-6% comfort zone. Separately, wholesale price index (WPI) data pegged factory gate inflation at 9.9% in Aug, from 9.8% in July, on the back of higher fuel and manufactured goods prices.NSO data estimated that food inflation accelerated to 6% in Aug, compared to 5.5% in July. The impact of fresh hostilities in West Asia, which has increased oil prices, was seen in sectors, such as transport and restaurants.
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