New Delhi : Lower food prices especially vegetables drove down Consumer Price Index (CPI)-based retail inflation to 5.30 per cent in August as against 6.69 per cent in the same month last year, showed NSO data released on Monday.
The cooling of prices was, however, marginal compared with July this year when inflation rate was 5.59 per cent.
Consumer Food Price Inflation (CFPI) in the month of August came in at 3.11 per cent compared to 3.96 per cent in July. In August last year, the CFPI was 9.05 per cent.
Softening of retail inflation in August is a major relief for consumers ahead of festive season.
The data though showed edible oil prices remained quite high as ‘oils and fats’ inflation in August was 33 per cent.
“The welcome decline in the CPI inflation in August 2021 was broad-based, led by all the components except clothing and footwear, and fuel and power. Contrary to our apprehension, the CPI inflation receded appreciably to 5.3 per cent in August 2021, led by lower than expected food inflation,” said Aditi Nayar, Chief Economist, ICRA.
Nayar said that the cooling of food & beverages inflation was the chief driver behind the moderation in the CPI inflation to a four month low 3.8 per cent in August 2021.
“In month-on-month terms, the food & beverages basket remained flat, with downticks in eggs, meat and fish, fruits, pulses and cereals, absorbing the upticks in milk, oils and fats, vegetables, sugar and spices,” she said.