Veggies push inflation to 15-mth-high of 7.44%

As expected, very high vegetables inflation has cooked up rise in retail inflation to gruesome levels in July 2023. CPI inflation has increased for last two straight months running to July, 2023. It has come at very high levels of 7.44 per cent in July 2023. Both rural and urban inflation also increased to more than 7 per cent in July, 2023.  July’23 CPI inflation has now reached near 15 month high levels. CPI Inflation has once again breached the Reserve Bank of India’s (RBI) upper limit of tolerance band of 6 per cent. If this trend continues, the central bank may not cut interest rate in near future or may be even consider raising rates. This will force banks to increase lending rates in the country. EMIs may go up as a result. Currently, the repo rate stands at 6.50 per cent.

Retail inflation was continuously falling since the beginning of this year but then, the inflation trajectory has taken an upward trend since May, 2023.

In its latest Monetary Policy Committee (MPC) meet, the Reserve Bank of India (RBI), increased inflation forecast in Q2 FY24 to 6.2 per cent. The apex bank also upped the forecast for the full financial year 2023-24 from 5.1 per cent to 5.4 per cent.

Sharp rise in vegetable prices has led to second straight month of rise in CPI Inflation to 7.44 per cent in July, 2023. Vegetables inflation had increased every month in this calendar year barring the month of May, 2023. It increased to very high level of 37.34 per cent in July, 2023. Recent steps taken by the government have failed to reduce food prices in the country. Food prices have continued to trouble the bourgeois in the country.

Food inflation has more than doubled to 10.57 per cent in July 2023.

Pulses and products inflation too has played spoilsport in RBI’s efforts of bringing down inflation in the country.

Pulses and products inflation had continuously increased for past fourth months. Pulses and products inflation for July  2023, increased to 13.27 per cent.

Tur Dal has become costlier by Rs 28/ kg in last one year. Tur Dal prices are currently ruling at Rs 136/kg in the retail market. Whereas, rice has become costlier by Rs 4/ kg. Average price of the prime staple food of the country has increased from Rs 37/kg to Rs 41/kg in the last one year. Tomato prices have increased by almost four times in the same period from an all India average of Rs 33/kg to Rs 127/kg.

High spices inflation has remained headache for the government for at least last one year now. In July 2023, CPI Inflation for spices came at high levels of 21.63 per cent.

Personal care and effects inflation has also been at elevated levels for a past few months now. It reached 9.03 per cent in July, 2023.

Any good news for fitness enthusiasts?

Yes, egg and meat & fish inflation came at 3.82 per cent and 2.25 per cent, respectively. Egg inflation has almost halved from 7.03 per cent in the preceding month.