Retail inflation rose to 3.21% in August - the highest in 10 months

Inflation Data Leaves Room For RBI Rate Cut In October Economists

India's factory output accelerated to 4.3% in July from a downward-revised 1.2% a month ago while retail inflation quickened to 3.21% in August from 3.15% in the previous month, remaining within the central bank's comfort zone. This is the highest level recorded in the past ten months since October 2018.

The etail inflation rate rose to 3.21 percent in August, driven by higher food prices, the government said on Thursday.

Consumer food price inflation stood at 2.99% in August compared to 2.36% in July.

Retail inflation in rural areas declined slightly from 2.19% in July to 2.18% in August.

Analysts polled by Reuters had forecast a retail inflation rate of 3.30% for August.

Consumer price-based inflation at 3.21 per cent is well below the Reserve bank of India's (RBI's) medium-term target of 4 per cent.

Inflation in meat and fish basket was 8.51 per cent, pulses and products 6.94 per cent and vegetables 6.9 per cent.The retail inflation in health was recorded at 7.84 per cent and in recreation and amusement at 5.54 per cent.

According to data released by the Ministry of Statistics and Programme Implementation, industrial output grew at 3.3 percent in April-July period this fiscal, down from 5.4 percent growth in the same period a year ago. "Core goods prices increased again in August and are up 0.8% over the past year- the largest one-year gain since 2012". The central bank, which has already reduced the key policy rate four times in the current calendar year, is scheduled to announce its next bi-monthly monetary policy on October 4.

In terms of industries, 13 out of 23 industry groups in the manufacturing sector have shown positive growth during July as compared to the same month a year ago.

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