CPI Inflation in August 2023, dropped a bit to 6.83 per cent vis-a-vis July 2023. Rural inflation has fallen to 7.02 per cent. While, urban inflation has corrected to 6.59 per cent in August, 2023. Nevertheless, retail inflation continues to trouble common man. After showing some correction in the initial part of current calendar year, it again started to increase from June, 2023 onwards.
Although, retail inflation corrected a bit in August 2023. It is still above RBI’s upper band of tolerance level. Elevated level of inflation print in August can be attributed to high inflation in vegetables, pulses, food and beverages, spices and personal care and effects. Meat and fish inflation too increased for third consecutive month in August 2023.
Inflation had began to show correction initially in the current current calendar year. It had showed decent correction till May 2023. But from June 2023 onwards, it again began to rise mainly due to abnormal rise in vegetable prices due to erratic rainfall in the current monsoon season.
Vegetables inflation has continuously increased this year. August, 2023, vegetables inflation print came at 26.14 per cent. Tomato prices had zoomed to abnormal levels in August. Onion prices too troubled citizens a lot.
If vegetable prices have wreaked havoc in past few months, prices of pulses are also not behind.
Pulses and products inflation has been quietly rising since March, 2023. In the initial part of the year, it was rising in single digits. But, since, June 2023, it has risen in double digits. Although, CPI Inflation of pulses and products corrected a bit in August, but it still came at double digits of 13.04 per cent in August, 2023.
Rising pulses prices is alarming for the government. Already, prices of pulses is ruling at elevated levels. And now there are reports that sowing of pulses in the Kharif season has been hit by deficit rainfall in the ongoing monsoon. The government will have to actively monitor availability of pulses in the market. Otherwise, like tomatoes and onion, pulses prices too may go through the roof in time to come. E.g. in last one year, tur dal prices have increased by nearabout 30 per cent. As of September 11, 2023, average price of tur dal in the country was Rs 144/kg. One year ago, tur dal prices was Rs 111/kg.
After showing modest correction in initial part of the year, food and beverages inflation has started to see an uptake in preceding two months to August, 2023. But owing to recent measures taken by the government, food and beverages inflation showed marginal correction in August and fell down to 9.19 per cent.
Fruit inflation has been on the lower side in last one year. But off-late, it has started showing pick up from June 2023 onwards. Fruit inflation has risen continuously for last three months. August, 2023. Fruit inflation rose for third straight month in August 2023 to 4.05 per cent.
Highly spiced inflation
Spices inflation has remained in double digits in last one year. In August 2023, CPI Inflation print of spices increased to 23.19 per cent.
Cereals and products inflation after increasing continuously in June and July moderated slightly to 11.85 per cent in August 2023.
Personal care and effects inflation too has also been elevated for past few months now. Personal care and effects inflation came in at 8.12 per cent in August 2023.
Milk inflation fell for third consecutive month in August 2023 to 7.73 per cent.
Bad news for non-vegetarians:
Meat and fish inflation has largely remained muted as the year 2023 has progressed. But off-late, meat and fish inflation has started showing signs of pick up since June 2023. It has now risen to third consecutive month in August, 2023, to 3.68 per cent.
Egg inflation also increased to 4.31 per cent in August, 2023.