India's consumer price inflation based on the consumer price index shot up further hitting 3.36 per cent in August 2017, up from 2.36 per cent in July, continuing an upward trend of the past three months. The spike was due mainly to a sudden seasonal spurt in the prices of fruits and vegetables and higher prices of some food articles.
The August figure of 3.36 per cent is the highest level of consumer price inflation under the new series with the lowest being the 1.54 per cent registered in July.
The government is releasing consumer price inflation data since January 2012 based on combined data for rural and urban consumers.
The onset of monsoon generally exerts an inflationary pressure on the prices of essentials, including food, and lasts till rains end and fresh crop starts arriving in markets, say experts.
Consumer price inflation for the rural areas stood at 3.30 per cent in August 2017 against 2.41 per cent in July and 5.87 per cent in August 2016.
Consumer price inflation for the urban areas stood at 3.35 per cent in August 2017 against 2.17 per cent in July and 4.22 per cent in August 2016.
Food price inflation (combined) stood at 1.52 per cent in August 2017 against the negative growth of (-) 0.29 per cent registered in July 2017 and the 5.91 per cent recorded in August last year.
Food price inflation for rural areas stood at 1.38 per cent in August 2017 against (-)0.07 per cent in July 2017 and 6.32 per cent in August 2016.
Food price inflation for urban areas stood at 1.67 per cent in August 2017 against (-) 0.99 per cent in July 2017 and 5.10 per cent in August last year.
If the trend continues, RBI's Monetary Policy Committee (MPC), which has a mid-term inflation target of 4 per cent, may have to think twice before easing liquidity further.