Free Press Journal

Aug retail inflation eases to 3.66% on cheaper veggies, fruits

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Inflation Down

New Delhi: Retail inflation fell to a new low of 3.66 per cent in August due to a slower rate of price rise in vegetables, fruits and protein items, except pulses, which may prompt the Reserve Bank to cut rates at its September 29 policy meet. Food inflation measured on Consumer Food Price Index during the month, however, rose slightly in August at 2.20 per cent as against 2.15 per cent in July 2015, government data showed today.

Besides, the rate of price increase in vegetables was recorded at a negative 6.36 per cent during the month under review, while fruits were cheaper with an inflation print of 0.99 per cent. In August 2014, retail inflation was at 7.03 per cent. The Consumer Price Index (CPI) based retail inflation for July 2015 was revised downwards to 3.69 per cent from 3.78 per cent, according to government data.

However, prices of protein rich pulses continued to rise at a higher rate with inflation for ‘pulses and products’ category remaining firm at 25.76 per cent. However, among other protein rich items such as meat and fish, the rate of price rise was slower at 5.79 per cent.


Likewise, milk and its products were also cheaper in August than a year ago level at an inflation figure of 5.33 per cent. Among others in the list, inflation in eggs slowed to 2.3 per cent, however, the rate of price rise for ‘cereals and products’ was faster with an inflation at 1.22 per cent. As per the data from the Ministry of Statistics and Programme Implementation (MOSPI), inflation in sugar and confectionery category slowed further to (-) 13.33 per cent; 8.37 per cent for spices and 4.43 per cent for non-alcoholic beverages. “We definitely expect one rate cut in September w ether the Fed hikes rates or not. I think a lot of thin s have been factored in.

“I am not sure about just one cut coming from here. The way the world is moving and if you look at the similar kind of trajectory where the world is going now, we can definitely expect at least one or may be two more cuts,” said Jayesh Mehta, Managing Director & Country Treasurer, Bank of America.