According to the data, Rajasthan had the highest inflation rate, while Delhi had the lowest
Consumers should breathe easier knowing that retail inflation in India decreased in August as a result of declining food and vegetable costs.
Read more : India’s growth was expected to be about 6% by Goldman Sachs, lower than the RBI’s forecast of 6.5%
The CPI inflation rate, which peaked in July at 7.44%, a 15-month high, fell to 6.83% in August, according to data issued on Tuesday by the Ministry of Statistics and Programme Implementation.
The country's food inflation, which makes up about half of the total basket, increased by 9.94% in August compared to an increase of 11.51% in July.
The data showed that among the states, Rajasthan had the highest inflation rate and Delhi had the lowest. Inflation in Delhi was 3.09% in August 2023, while it was 4.01% in Assam and 4.79% in West Bengal.
According to figures from the Press Information Bureau, the aggregate inflation rate for the Union Territories of Jammu & Kashmir and Ladakh was 5.45%, while it was 5.52% in Chhattisgarh.
The year-over-year (YoY) inflation rates of the other main states for rural, urban, and combined for August 2023 were between 6 and 8%.
In four states, the CPI inflation rate stayed above 8% in August. According to the report, they were Rajasthan (8.60%), Telangana (8.27% each), Himachal Pradesh (8.27%), and Odisha (8.23%).
In the meantime, the nation's total core inflation rate decreased to 4.8% YoY from 5% in July, a 41-month low. Core inflation was helped by the transportation and communications (T&C) sector and the clothes and footwear sector.
Core service inflation remained constant at 3.9% YoY, the lowest level since November 2019.
According to economists, the headline inflation rate will continue to decline in September and will drop below 6%.
According to our predictions, headline inflation could drop to 5.7% YoY in September 2023 and 5% in 2HFY24. This translates to inflation of 5.4% YoY in FY24, up from our earlier prediction of 4.5%. Nikhil Gupta, Chief Economist of Motilal Oswal Financial Services Ltd., stated that as a result, we anticipate the RBI to maintain interest rates at current levels for the foreseeable future.
Mohit Ralhan, CEO of TIW CAPITAL, believes that the better-than-expected inflation data indicates that the RBI would keep the policy rate unchanged at its upcoming meeting.
The transient shock from vegetable prices has kept core inflation from rising. However, the central bank will remain cautious considering that the global crude benchmark, Brent, is trading around $90 per barrel and August rainfall has been below average. Ralhan went on to say.
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