Retail inflation rises to 4.82% in August on higher food prices

Retail inflation rose to 4.82 per cent in August, driven by higher food prices, particularly onions and garlic. Food inflation climbed to 5.95 per cent, while wholesale inflation also increased to 9.92 per cent during the month

New Delhi: Retail inflation rose to 4.82 per cent in August, driven by costly onions and other food items, remaining above the Reserve Bank of India’s median target, according to government data released on Monday.

Wholesale price-based inflation also increased to 9.92 per cent in August from 9.78 per cent in July.

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The Consumer Price Index (CPI)-based retail inflation was 4.45 per cent in July.

August retail inflation is the highest since the new series, with 2024 as the base year, came into effect in January.

The higher CPI reading will be a key factor in deciding policy rates when the RBI’s Monetary Policy Committee (MPC) meets early next month.

According to National Statistics Office (NSO) data on CPI for August, retail inflation rates in rural and urban areas were 5.23 per cent and 4.31 per cent, respectively.

Retail food inflation in August climbed to 5.95 per cent from 5.52 per cent in the preceding month.

Inflation in onions rose to 48.27 per cent in August from 22.54 per cent in July.

Inflation in garlic rose to 43.6 per cent from 35.36 per cent in July. The rate of price rise in ginger was also high at 73.82 per cent compared to July.

On the other hand, there was a contraction in prices of tomato, potato, lady’s finger and parwal.

The highest retail inflation was recorded in Telangana at 6.27 per cent and the lowest in Mizoram at 2.35 per cent.

The Reserve Bank governor-headed MPC, which factors in retail inflation while arriving at the key interest rate (repo rate), is scheduled to meet from October 5 to 7.

After the August MPC meeting, the Reserve Bank of India had kept key short-term policy rates unchanged amid inflation worries. It had projected CPI inflation for 2026-27 at 5 per cent, with Q2 at 4.7 per cent, Q3 at 5.9 per cent and Q4 at 5.5 per cent.

The government has mandated the RBI to ensure CPI-based inflation remains at 4 per cent, with a margin of 2 per cent on either side.

The wholesale price inflation print is the second highest in the new WPI series, with 2022-23 as the base year.

In August, wholesale food inflation rose to 7.05 per cent from 6.65 per cent in July. In manufactured items, WPI inflation stood at a series high of 8.37 per cent compared to 8.29 per cent in July.

In the fuel and power basket, WPI-based inflation was 22.93 per cent in August against 20.05 per cent in July.