(Image source: Reuters)

India CPI Inflation Rate 2020: The country’s retail inflation spiked to 6.93 per cent in the month of July mainly on account of higher food prices, the data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed.

The retail inflation which is measured by the Consumer Price Index (CPI) for the month of June was also revised to 6.23 per cent from 6.09 per cent, the data revealed.

Prior to June’s data, the government had not released the headline retail inflation data in April and May. However, in April, it had revised the CPI data for the month of March to 5.84 per cent from 5.91 per cent.

The retail inflation has grown beyond the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the Indian central bank to keep inflation within the range of 4 per cent with a margin of 2 per cent on either side.

Last week, the central bank had kept its key interest rates on hold even as it vowed to keep policy sufficiently loose to help revive the coronavirus-battered economy.

The Consumer Food Price Index (CFPI) or the inflation in the food basket surged to 9.62 per cent in the month of July. The CFPI for June too was revised to 8.72 per cent from 7.87 per cent, the data showed.

The retail inflation growth was mainly due to a rise in pulses and products prices that saw a 15.92 per cent on-year rise in July. Apart from pulses and products segment, the meat and fish segment saw a rise of 18.81 per cent, while that of oils and fats rose 12.41 per cent and spices prices gained 13.27 per cent. The vegetables segment also witnessed a rise of 11.29 per cent.

Reflecting on the development, Rahul Gupta, Head of Research- Currency at Emkay Global Financial Services said, “Despite the nationwide lockdown is easing, the food inflation still remains a concern as regional lockdown still persists. Eventually, with better monsoon and further easing of lockdown, we can expect inflation to come under RBI’s target range. But until the CPI hovers above 6 per cent, RBI will remain hesitant on cutting repo rate.”

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