The Finance Ministry late Monday termed the increase in retail inflation from 6.71% in July to 7% in August as ‘moderate’, and attributed it to an adverse base effect and an increase in food and fuel prices, which it called “the transient components” of Consumer Price inflation.
Core inflation, which excludes these ‘transient components’ of food and beverages as well as fuel and light inflation, was recorded at 5.9% in August, remaining below the tolerance limit of 6% for the fourth consecutive month, the Ministry emphasised.
“Despite erratic monsoons and negative seasonality in vegetable prices, food inflation in July still lower than the April peak of the current year. To soften the prices of edible oils & pulses, tariffs on imported items have been rationalised periodically & stock limits on edible oils have been kept, to avoid hoarding,” the Ministry said.
