New Delhi — India’s consumer price index (CPI) inflation rose to 2.07% year-on-year in August, up from a revised 1.61% in July, government data showed on Friday, nudging inflation back up though it remained well inside the Reserve Bank of India’s 2–6% target band.
The uptick was driven largely by a slower pace of deflation in food items: food prices fell 0.69% in August compared with a sharper 1.76% decline in July, while vegetable prices continued to contract but by less (-15.92% versus -20.69% in July), tempering the downward pressure on the overall index.
Analysts said the rise reflected fading base effects and seasonal weather patterns that have the potential to push up prices for summer-sown crops; above-normal rainfall in August and forecasts for continued heavy rain in September could affect supplies of rice, cotton, soybean and pulses.
Policymakers will view the data in the context of persistently low inflation over recent months and recent government measures such as targeted tax cuts on select food and consumer goods, which authorities say should help moderate future price pressures. Markets and the RBI will likely weigh the print against global inflation trends and domestic growth dynamics when assessing the policy outlook.
