August Retail Inflation On A Softening Trend: Anand Rathi

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Retail inflation in August 2021 at 5.3% was less than consensus expectation.

The fall in retail inflation was driven almost exclusively by food inflation, which softened to 3.1% from 4% last month, while core inflation was unchanged.

Despite high (30% plus) and rising edible oil inflation and high egg and beverage inflation, deflation in cereals and vegetables kept food inflation low.

With good kharif sowing (despite a rain deficit) and modest minimum support price hikes in the last three seasons, the outlook for food inflation is benign.

Core inflation has been hovering ~6% for the last 12 months. This is largely due to the transport category, which technically should not be part of core inflation.

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Anand Rathi Retail Inflation August.pdf


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