August saw some good news about the reduction of inflation. Following the decrease in vegetable costs, it has declined nationwide. August saw a decrease in retail inflation of 6.83 percent as a result of a lowering of vegetable prices. It is still over the Reserve Bank of India’s satisfactory level, though. At the same time, retail inflation in July had risen to 7.44 percent, a 15-month high.
NSO published data
The National Statistical Office (NSO) recently issued data showing that food inflation in August was 9.94 percent, compared to 11.51 percent in July.
The inflation rate needs to be lowered to 4%
In August of last year, the Consumer Price Index indicated 7% inflation. Retail inflation last month reduced, but it is still beyond the RBI’s acceptable limit. The central bank is in charge of maintaining an inflation’s rate of 4% with a 2% margin of error.
Everything got less expensive, inflation dropped, including food and oil
The findings show that vegetable inflation, which was 37.4 percent in July, reduced to 26.14 percent in the month under review. Oil and fat product inflation dropped to 15.28 percent. On an annual basis, it has been low for meat, fish, eggs, sugar and “confectionery” (biscuits, chocolates, etc.), non-alcoholic beverages, fruits, and ready meals and “snacks” (nankeens, chips, etc.). The results show that the housing sector has experienced hike of 4.38 percent, while the fuel and light sector has experienced inflation of 4.31 percent.
Low vegetable prices
According to Aditi Nair, chief economist and research director at rating agency ICRA, the inflation’s rate for food goods including veggies has decreased to 26.1 percent from 37.4 percent last month. They contributed 0.28 percent to the 0.61 percent drop in retail inflation over this time. According to him, the primary (core) inflation’s rate, which is calculated without accounting for the cost of fuel, food, and other consumables, decreased slightly from the previous month’s 5.12 percent to 5.06 percent in August of this year. It has declined for the past three months.
According to RBI, 5.4 percent
According to the RBI, it would be 5.4 percent during the current fiscal year. In the second quarter, 6.2 percent is anticipated, followed by 5.7 percent in the third quarter and 5.2 percent in the fourth. The first quarter’s rate was predicted to be 5.2 percent. It is interesting that retail inflation, which peaked at 7.8 percent in April of last year, has eased to 4.8 percent in June 2023. However, it grew to 7.4 percent in July, primarily as a result of a rise in vegetable costs.
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