Adverse Base Effect, Food Prices Raise Retail Inflation In August: Finance Ministry

Adverse Base Effect, Food Prices Raise Retail Inflation In August: Finance Ministry

Domestic supplies and curb price rises, the impact of which will be seen in the coming weeks, the finance ministry said on Tuesday.

Updated on 14 Sep, 2022: Headline inflation, based on the retail consumer price index (CPI), rose to 7% in August 2022.

This is due to negative base effects and higher food and fuel prices. The government has banned the export of foodstuffs such as flour/ata, rice and maida in a bid to stabilize domestic supplies and curb price rises, the impact of which will be seen in the coming weeks, the finance ministry said on Tuesday.

“Headline inflation, which is based on the retail consumer price index, rose moderately from 6.71% on 22nd July to 7.0% on 22nd August.

This is due to both higher food and fuel prices, which are temporary factors,” the ministry said in a series of tweets.

It is the core inflation rate calculated by excluding the temporary component of the CPI, i.e. Food & Beverage and Fuel & Light both recorded 5.9% in August 2022, the fourth consecutive month below the acceptable level of 6%.

Food inflation, which accounts for almost half of the CPI basket, accelerated to 7.62% in August this year, rising from 6.69% in July, according to the latest data released by the National Bureau of Statistics.

Prices of cereals, legumes, vegetables, milk, legumes and other commodities were higher in August than he was in July.

“Prices of critical raw materials such as iron ore and steel have plummeted in global markets. ,” the ministry said in a tweet, adding that this was despite the irregular monsoons, which was a negative due to the seasonality of the vegetables.

Global inflationary pressures have kept Indian inflation expectations pegged and core inflation stable.

“In July 2022, his one-year-ahead business according to the IIM Ahmedabad Survey His inflation expectations fell 34 basis points to 4.83% from 5.17% in June. Inflation expectations fell to 4.83%.

After a month, it was below 5%,” he said. Tariffs on imported items were regularly streamlined to bring down the prices of edible oils and legumes, and edible oil inventories were maintained to avoid hoarding. Oils and Fats and Pulses and Produce inflation rates fell to 5.62% and 2.52% respectively.

The Ministry of Finance also said, “The government has banned the export of foodstuffs such as flour/ata, rice and maida in order to stabilize domestic supply and curb price rises.

The effect of these measures will be seen in the coming weeks. It is expected that it will be felt more clearly in the months to come.”

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