Home Economy Inflation in India Hits 15 Month High RBI to Raise Rates

Inflation in India Hits 15 Month High RBI to Raise Rates

Inflation in India Hits 15 Month High RBI  to Raise Rates
Representational image. Photo: PTI

In July 2023, India’s inflation rate went up a lot, like, it was 7.44 percent, the highest in 15 months. The prices of stuff like vegetables, cereals, pulses, spices, and milk went higher, and the National Statistical Office (NSO) said this on a Monday.

This is the third time this year that the inflation has gone over the line set by the Reserve Bank of India (RBI) which is 4+/- 2 percent. The RBI looks at the inflation when they decide on the repo rate, which is a kind of money thing.

The prices of food, like vegetables and cereals, made the wholesale prices also go up. Wholesale inflation, that’s like a number for prices, went from -4.12 percent in June to -1.36 percent in July. But, if you look at the same time last year, it’s been going down for four months.

This happened after the RBI looked at things and didn’t change the repo rate from 6.50 percent. They still wanted the things to be the same, but they said that the inflation for the year 2024 might be higher, like 5.4 percent, ’cause food prices are high. That means it’s not very likely they’ll cut rates.

ALSO READ  UK Job Market Cools, as Labor Supply Rises and Hiring Slows

The RBI said that inflation might stay above 5 percent until early 2024-25, and this quarter (July-September) might be at 6.2 percent.

The Consumer Food Price Index (CFPI) said that food prices went way up to 11.51 percent in July, it was like 4.55 percent before. Food and drinks, which is like half of everything we buy, got 10.57 percent more expensive in July, from 4.63 percent in June. The prices for cereals and stuff went up to 13.04 percent, and vegetables, wow, they went to 37.34 percent in July. There’s more stuff that got pricier like pulses, milk, spices, and even cooking oils.

The prices for gas and lights, you know, went down in July, and even housing costs got a bit lower.

The smart people said that prices might keep going higher, like over 6 percent, and maybe the RBI’s number for the second quarter, 6.2 percent, might change.

Because it didn’t rain enough, vegetable prices might go up more, and the prices might not go down ’til the next time they gather food. But the RBI might not make rates higher because of this.

ALSO READ  How China's Hidden Currency Reserves Could Affect the Global Economy

Lastly, there’s a number that doesn’t count food or gas stuff, and that went lower in July, and more prices went higher in places away from the city. Some states had more expensive stuff, with the biggest in Rajasthan, then Jharkhand, Tamil Nadu, Odisha, and Uttarakhand.