With sharp rise of prices in sugar, confectionery items, pan, tobacco and intoxicants, retail inflation jumped to 2.36 per cent in July, while high prices on some food articles pushed the wholesale inflation to around 1.9 per cent in the same month even as the industry’s clamour was louder for the cut in interest rates following weak industrial activity in the country.
Food inflation, however, saw deflationary pressure at (-) 0.29 per cent in July compared to (-) 2.12 per cent in June this year, showed consumer price index data released by the Central Statistics Office (CSO) on Monday.
Retail inflation as measured by the consumer price index (CPI) was revised downwards to 1.46 per cent for June. “The price of sugar and confectionery items also went up by 8.27 per cent in July while pan, tobacco and intoxicants turned dearer by 6.39 per cent. Housing expenses saw a price increase of 4.98 per cent while that of the fuel and light segment was up by 4.86 per cent. Retail price of clothing and footware items also went up by 4.22 per cent,” said the CSO data.
As far wholesale inflation is concerned, it also rose sharply to 1.88 per cent in July. As per the Government data it was the first rise in last five months as some food articles turned dearer.
Inflation based on the wholesale price index or WPI was 0.90 per cent in June 2017 and 0.63 per cent in July 2016. The doubling in the rate of inflation in July, the first month of the Goods and Services Tax (GST) rollout, was mainly on account of turnaround in prices of food articles, especially vegetables. WPI inflation has been in decline since March.
Food articles, which were witnessing deflation for the previous two months, saw inflation go up to 2.15 per cent in July on a yearly basis. Similarly, vegetable prices, which had witnessed a 21.16 per cent contraction in June, too shot up 21.95 per cent in July.
However, manufactured products saw a slight fall in inflation at 2.18 per cent in July, compared to 2.27 per cent in June. In the fuel and power segment, inflation witnessed a decline at 4.37 per cent in July, over 5.28 per cent in the previous month.
Ficci President Pankaj Patel said that there is space for a more accommodative stance in the monetary policy as private sector investments continue to remain weak.