Retail inflation rises to 3.65% in August: vegetables costlier, pulses cheaper; The 5-year low was at 3.54% in July

Retail inflation rose to 3.65% in August due to increase in vegetable prices. It fell to 3.54% in July. This was the lowest level of inflation in 59 months. At the same time, the food inflation rate increased from 5.42% to 5.66%. Urban inflation also rose to 3.14% from 2.98% on a month-on-month basis. Rural inflation rose to 4.16% from 4.10%. Food inflation has come down to 5.66% from 9.94% in August 2023. Food accounts for about 50% of the inflation basket. Its inflation rose to 5.66% from 5.42% on a month-on-month basis. While a year ago in August 2023, food inflation was 9.94%. That means it has also decreased on an annual basis. RBI keeps inflation forecast at 4.5% for this fiscal year During the recent Monetary Policy Committee meeting, RBI kept its inflation forecast for this fiscal year at 4.5%. This was also the case earlier. The RBI Governor said – Inflation is coming down, but the progress is slow and uneven. India's inflation and growth path is moving in a balanced manner, but it is important to remain vigilant to ensure that inflation remains on target. How does inflation affect? Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, the earnings of Rs 100 will be only Rs 94. So investment should be done keeping in view of inflation. Otherwise the value of your money will decrease. How does inflation rise and fall? The rise and fall of inflation depends on the demand and supply of the product. If people have more money they will buy more things. Buying more goods will increase the demand for the goods and if the supply does not meet the demand then the price of these goods will increase. Thus the market becomes vulnerable to inflation. Simply put, excessive flow of money in the market or shortage of goods causes inflation. When demand is low and supply is high, inflation will be low. Inflation is determined by CPI As consumers, you and I buy goods from the retail market. The change in prices related to this is done by the Consumer Price Index i.e. CPI. CPI measures the average price we pay for goods and services. Apart from crude oil, commodity prices, manufacturing costs, there are many other factors that play an important role in determining the rate of retail inflation. There are about 300 items on the basis of which the retail inflation rate is determined.

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