CMIE Report: Retail inflation may again reach above five percent after two months

New Delhi| Retail inflation could rise in September, 2024 to reach 5.03 per cent, two months later, out of the 4 per cent range of RBI, due to a sharp rise in the prices of food items and especially onion and tomato. Earlier in June, retail inflation had been 5.08 percent, while in July and August it had come down to 3.60 percent and 3.65 percent respectively.

According to the report of Center for Monitoring Indian Economy (CMIE), retail inflation may increase by 1.38 percent in September i.e. in one month as compared to August. The inflation rate for food items could also rise by 2.3 per cent to reach the level of 8 per cent. Food inflation had been 5.7 per cent in August. The report said that between December, 2023 and June, 2024, the inflation rate of vegetables had remained in the range of 27-30 per cent. In July and August this year, it decreased to 6.8 per cent and 10.7 per cent respectively. Due to this, there was a decline in retail inflation in both these months. The government may release retail inflation figures for September on October 14.

According to CMIE, onion prices, which have been rising continuously since June, have increased by another 13.4 percent in September. During this period, the price of onion has increased from Rs 36 to Rs 51 per kg in the retail market. Citing data released by the Department of Consumer Affairs (DCA), the report said tomato prices had seen a slight decline, but have become more expensive by more than 10 per cent in the second half compared to the first fortnight of September.

Vegetable prices, which contribute 1.2 per cent to retail inflation, are expected to decline marginally in September, the report said. The prices of some vegetables have decreased. The retail price of potatoes has decreased. Market prices of vegetables like brinjal, cabbage and ladyfinger have also fallen by more than seven percent. However, the sharp increase in the prices of onion and tomato may reduce the impact of fall in the prices of other vegetables.

According to the report, inflation of pulses is expected to decline due to good Kharif crop. Its inflation rate may decline to 9.5 percent in September from 13.6 percent in the previous month. Inflationary pressure on grains, meat, fruits, spices and sugar has reduced. Inflation rate of oil and fat may increase.