New Delhi3 days ago
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Retail inflation has increased to 3.65% in August due to the rising prices of vegetables. It had come down to 3.54% in July. This was the lowest level of inflation in 59 months.
At the same time, food inflation has increased from 5.42% to 5.66%. Urban inflation also increased from 2.98% to 3.14% on a month-on-month basis. Rural inflation reached 4.16% from 4.10%.
Food inflation was 9.94% in August 2023, now it has come down to 5.66% Food items contribute about 50% to the inflation basket. Its inflation has increased from 5.42% to 5.66% on a month-on-month basis. Whereas a year ago in August 2023, food inflation was 9.94%. That is, it has also decreased on an annual basis.
RBI had projected inflation at 4.5% for this financial year During the recent Monetary Policy Committee meeting, RBI had kept its inflation forecast for this financial year at 4.5%. It was the same earlier as well.
The RBI governor had said – Inflation is coming down, but the progress is slow and uneven. India’s inflation and growth trajectory is moving in a balanced manner, but it is important to remain vigilant to ensure that inflation remains in line with the target.
How does inflation affect? Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then the value of Rs 100 earned will be only Rs 94. Therefore, investment should be made keeping inflation in mind. Otherwise, the value of your money will decrease.
How does inflation increase or decrease? 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 things will increase the demand for things and if the supply is not according to the demand, the price of these things will increase.
In this way the market falls prey to inflation. In simple words, excessive flow of money in the market or shortage of things causes inflation. On the other hand, if the demand is less and the supply is more, then inflation will be less.
Inflation is determined by CPI As a consumer, you and I buy goods from the retail market. The Consumer Price Index (CPI) shows the changes in the prices related to this. CPI measures the average price we pay for goods and services.
Apart from crude oil, commodity prices, manufactured cost, there are many other things which play an important role in determining the retail inflation rate. There are about 300 items on the basis of whose prices the retail inflation rate is decided.