Retail inflation cools to 10-month low of 3.69%

New Delhi, September 12 

Retail inflation cooled to a 10-month low of 3.69 per cent in August — below the RBI’s target of 4 per cent — on the back of easing prices of fruits, vegetables and other food items, official data showed on Wednesday.

The lower retail inflation print comes amid a spike in petrol and diesel prices that have been on the rise since August 16. Also, the rupee has weakened in the recent weeks, making imports costlier.

The Consumer Price Index (CPI) based inflation was at 4.17 per cent in July and 3.28 per cent in August 2017. The previous low for the CPI inflation was in October 2017, when it stood at 3.58 per cent. Inflation remained above the RBI’s targeted rate of 4 per cent since then.

The Central Statistics Office (CSO) data showed that inflation in the food basket fell significantly to 0.29 per cent in August 2018 as against 1.37 per cent in the previous month.

Vegetable prices declined by 7 per cent in the month under review. The rate of price rise in fruits stood at 3.57 per cent, compared to around 7 per cent in July. However, there was a moderate increase in inflation in the fuel and light segment. It rose to 8.47 per cent in August compared to about 8 per cent in July. Diesel accounts for 40 per cent of India’s fuel basket and is consumed mainly by the transport sector.

The RBI will be factoring in inflation data while deciding the interest rate at its next bi-monthly monetary policy meeting on October 5. It has been tasked to maintain the retail inflation at the level of 4 per cent (with a margin of 2 per cent on either side). 

Exports up in August

• The country's exports grew by 19.21 per cent to $27.84 billion in August on account of healthy performance by sectors such as petroleum. Merchandise imports too rose by 25.41 per cent in August to $45.24 billion due to the rising crude oil prices, leaving a trade deficit of $17.4 billion. 

IIP grew at 6.6% in July

• Industrial production grew at 6.6 per cent in July on the back of good performance by the manufacturing sector and higher offtake of capital goods and consumer durables. The IIP growth for June was also revised downwards to 6.8 per cent from the provisional estimate of 7 per cent released last month. — PTI