Retail inflation rises to 7% in August; remains above RBI's comfort level for 8th month

New Delhi, Sep 12: Retail inflation cut short its three-month declining trend and inched up to 7 percent in August mainly due to higher food prices, according to official data released on Monday.

The consumer price index (CPI) based inflation was 6.71 percent in July and 5.3 percent in August 2021.

The CPI inflation has remained above the RBI's comfort level of 6 percent for the eighth month in a row. The Reserve Bank factors in retail inflation while deciding on its monetary policy. According to the data released by the National Statistical Office (NSO), inflation in the food baskets was 7.62 percent in August, up from 6.69 percent in July and 3.11 percent in August 2021.

The rate of price rise was more than 10 percent in the case of vegetables, spices, footwear, and 'fuel and light' on annual basis.

However, there was a contraction in inflation in eggs and almost flat in protein-rich 'meat and fish during the month.

Inflation had reached a high of 7.79 percent in April before decelerating in the next months to 6.71 percent in July.

The government has tasked the Reserve Bank to ensure CPI inflation remains at 4 percent with a margin of 2 percent on each side.