In August, India’s annual retail inflation saw a drop to 6.83% from July’s 15-month peak of 7.44%, revealed government data. This figure came in lower than the anticipated 7% forecasted by a poll of 45 economists.
Food inflation, accounting for nearly half of the overall consumption basket, rose by 9.94% in August, down from a rise of 11.51% in July. Erratic weather conditions over the past year have adversely affected the production of essential food items like vegetables, milk, and cereals, posing a challenge for policymakers.
Last month, Reserve Bank of India Governor Shaktikanta Das highlighted the threat that abrupt spikes in food prices pose to anchoring inflation expectations. With inflation persisting above the central bank’s targeted range of 2%-6% for seven of the last twelve months, the Reserve Bank remains vigilant in its oversight.
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