CPI - Headline numbers
CPI - Component-wise
Inflation in August
After touching 15-month highs of 7.44% last month, Inflation moderated slightly to 6.83%, Although one may still argue that this is above RBI’s tolerance level of 6%, If we were to look at it as a glass half full, this is a relief for now as Government’s measures to impose taxes on exports of rice and easing imports of vegetables has resulted in cooling down of vegetable prices.
Source: Reuters
What lies ahead?
Inflation is not expected to drastically cool down anytime soon especially considering that the monsoon, overall was very weak and with crude oil prices back above 90$ per barrel.
With the festive season coming around, We may also see demand-led inflation going forward.
Overall, The upside risks are more evident than any major relief in the short run.