Inflation may increase due to lack of rain
The numbers that the government and the RBI have been waiting for for a long time have arrived. A record fall has been seen in the retail inflation numbers. According to data released by the government on Monday, India’s retail inflation declined to 3.54 per cent on an annual basis in July. These numbers have brought a lot of relief to the common people. After August 2019, for the first time in nearly five years, the inflation rate has fallen below the Reserve Bank of India’s medium-term target of 4 per cent.
In June, the inflation rate rose for the first time in five months. The main reason was rising food prices. The inflation rate therefore rose to 5.08 percent. The retail inflation rate in July 2023 was 7.44 percent, which at that time had reached a 15-month high. Earlier, a Reuters poll of 36 economists had estimated that the inflation rate would drop to 3.65 percent.
Retail inflation is within the 2-6 per cent tolerance level of the Reserve Bank of India (RBI). However, in the last few years, the country’s inflation has not remained permanently at an average level of 4 per cent. Which is very important for the RBI to reduce interest rates.
If we talk about rural inflation, it decreased to 4.10 percent in July, which was 5.66 percent in June and 7.63 percent in July 2023. Urban inflation also decreased from 4.39 percent in June to 2.98 percent in July. In the same month last year, urban inflation had increased by 7.2 percent.
