August retail inflation rises 3.36%

India's retail inflation or Consumer Price Index (CPI) grew 3.36% in August 2017 as against 2.36% in July 2017 and 5.05% in the corresponding month of the previous year, as per Ministry of Statistics and Program Implementation (MOSPI). 

MOSPI released CPI (Rural, Urban, Combined) on Base 2012=100 for the month of August 2017. In addition to this, Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined was also released for August 2017. 

source: tradingeconomics.com

Data further stated that Consumer Food Price Index (CFPI) stood at 1.52% in August 2017 as against 5.91% in the same month of last year. CFPI, however, rose from -0.36% in July 2017. 

For the month of August 2017 inflation rate of food indicators were - food & beverages at 1.96%, while pan,tobacco and intoxicants were at 6.85%, clothing and footwear at 4.58%, housing at 5.58%, fuel and light at 4.94% and lastly miscellaneous (health, transport, education, personal care, etc) stood at 3.85%. 

A Reuters poll of nearly 40 economists predicted higher CPI to 3.20% in August from a year ago on higher frequency in food prices

Nikhil Gupta and Rahul Agarwal, analysts at Motilal Oswal said, "An adverse base effect is set to kick in from August, which should push up CPI inflation in the near term."

In ICRA's view, while the volume of monsoon rainfall is near-normal at 3% below the long period average, its uneven geographic spread poses a concern, particularly the substantial 16% shortfall in precipitation in South Peninsula. 

It added, "The YoY decline in sowing of various oilseeds (-9.9%), pulses (-1.6%) and coarse cereals (-1.5%), may affect their prices and exert some upward pressure on the CPI inflation in coming months."

The Reserve Bank of India in its August 2017 monetary policy had projected average headline inflation  in the range of 2.0-3.55 in the first half of the year and 3.5-4.5% in the second half of FY18.