Retail inflation rises marginally to 2.07% in August: Government data

Business Economy

Posted by AI on 2025-09-12 12:39:40 | Last Updated by AI on 2025-09-12 14:37:04

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What does this latest inflation figure mean for the economy and consumers?

Government data released yesterday showed that India's retail inflation rose to 2.07% in August, up from 1.88% in July. This number is still within the Reserve Bank of India's (RBI) target of 2%-6%. The RBI has been mandated by the government to ensure inflation remains at 4% with a margin of 2% on either side.

The minor increase in inflation was driven by rising prices in the food segment, notably vegetables and pulses, which saw a spike of 0.29% and 0.35% respectively. This news will be of concern to policymakers, who are already facing the challenge of alleviating price pressures on the consumer while maintaining economic growth.

The core inflation rate, which excludes food and fuel prices, rose to 5.9%, reflecting continued underlying price pressures. This is the highest level since June 2014, and it will likely cause the RBI to consider further monetary policy action to curb inflation.

We conclude with a thought-provoking statement from a renowned economist:

"The rise in retail inflation, driven by food prices, is concerning, especially for a country like India with a large population struggling to afford its daily meals. While the rise is relatively modest, it highlights the need for effective policies to improve food supply chains and reduce bottlenecks. Addressing inflation is crucial for the central bank to safeguard the economic wellbeing of the lowest income segments."

This calls for urgent action from policymakers and further scrutiny of our economic trajectory.

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