NEW DELHI: An increase in food prices pushed up retail inflation to 2.36 per cent in July, firming up for the first time in three months, along with flat services costs. Retail inflation as measured by the Consumer Price Index was revised downwards to 1.46 per cent for June.
It is also a reflection of monthly kitchen costs, which continued to remain soft, with prices showing gradual improvement at (-) 0.29% from (-) 2.12 per cent in June against 8.35 per cent in the same period last year.
The fall in food inflation has been brought about by disinflation in the prices of mainly pulses and vegetables, which is assessed to be a stabilising factor.
Vegetable prices fell by (-)3.57 per cent in July compared with (-)16.53 per cent in June, prices of pulses fell (-)24.75 per cent, against (-)21.92 per cent in June. Prices of foods and beverages became costly by 0.43 per cent against (-)1.17 per cent growth. While fuel inflation was 4.84 per cent in June, against 5.46 per cent in May and data shows that housing inflation remained nearly flat, growing 4.98 per cent in July from 4.7 per cent in June.
Higher food articles and vegetable prices have pushed up wholesale inflation for July by 1.88 per cent, compared to 0.9 per cent in June. Wholesale inflation was low in July last year at 0.63 per cent.
Food prices of pulses, potatoes and onions experienced a free fall as a result of a supply glut. Vegetable prices were up 22 per cent in July as a result of a hike in tomato prices.
The heavy rains and delay in crop arrival to the mandi/markets made it costly for the consumers as the prices grew by 25.47 per cent in June. “However, the broad conditions for agri-prices remain conducive given normal monsoon in most parts of the country and stable global commodity prices. This outlook is also corroborated in the second part of the Economic Survey released last week,” said Pankaj Patel, president, FICCI.
The wholesale price index data shows the doubling in the rate of inflation in July was mainly on account of a turnaround in prices of food article, especially vegetables.