CPI inflation quickens

Inflation, as measured by the Consumer Price Index (CPI), printed above the upper tolerance limit of the Reserve Bank of India’s (RBI) target for the eighth straight month in August, at 7% on-year, compared with 6.7% the previous month. This jump was largely driven by accelerating food inflation and the fading base effect of last year, even as non-food inflation moderated slightly.

Inflation trends in August: Highlights
 

• CPI inflation rose to 7% on-year in August from 6.7% the previous month, and was also higher than 5.3% a year ago
• Food inflation saw the highest jump, from 6.7% in July to 7.6% in August
  
• Fuel¹ inflation moderated the most, to 10.8% from 11.8% in the previous month, and was lower than 12.9% a year ago
  
• Core CPI² inflation came down a notch, decreasing to 5.9% vs 6.0% in July, and 5.8% a year ago
  
• Inflation jumped in both rural (7.2% vs 6.8% in July) and urban areas (6.7% vs 6.5%)
  

¹ Refers to CPI fuel and light
² CPI excluding food and beverages and fuel and light