New Delhi: India’s retail inflation rate jumped to 7.44% in July – a 15-month high – thanks to the massive surge in vegetable prices, especially tomatoes in the last month.The data released by the Ministry of Statistics and Programme Implementation on Monday, August 14, showed that retail inflation easily breached the upper limit of the Reserve Bank of India’s tolerance band of 2% to 6% for the first time in five months.The Consumer Price Index (CPI) inflation for July is a huge jump of 257 basis points compared to the revised June number of 4.87%. It is also worth noting that it is the 46th month in a row that it has surpassed the RBI’s medium-term target of 4%.Recently, Reuters published a poll of 53 economists who had estimated that the CPI inflation would rise up to 6.40% on an annual basis on rising food prices. However, the latest figure show that it has even exceeded the expectation of economists, according to The Indian Express.From 4.49% in June, the consumer food price index (CFPI) jumped to 11.51%. And, the rural inflation rate in July rose to 7.63% year-on-year from 4.78% in July. On the other hand, urban inflation witnessed a jump from 4.96% to 7.20% in July.This comes against the backdrop of RBI keeping policy rates unchanged at 6.50% in its August monetary policy review. However, it raised the forecast for CPI inflation for fiscal 2024 from 5.1% to 5.4%.The RBI has already predicted that the inflation rate would see a further rise in the coming months owing to skyrocketing vegetable prices.While hoping that the surging vegetable prices may soon see a downward trend, it said “possible El Nino weather conditions, along with global food prices need to be watched closely, against the backdrop of skewed Southwest Monsoon”.
