India's Retail Inflation Sees An Uptick To 2.07% In August

India's retail inflation saw a reversal in trend in August, after easing to the lowest in eight years in July, led by a slight uptick in food prices and core items.

The consumer price index-based inflation was at 2.07% in August, compared to 1.55% in July, according to data published by the Ministry of Statistics.

CPI inflation was projected to ease to 2.11% in August, according to a median forecast of economists polled by Bloomberg. Despite the uptick, inflation remains well below the central bank's target of 4%.

In the food basket, vegetables disinflated at 15.9% compared to 20.7% in July. Tomato prices rose 16% compared to a deceleration of 34.1% last month.

Core inflation, which excludes the volatile food and fuel prices, stayed constant at 4.1% according to Bloomberg.

The August headline CPI inflation has come inline with expectations, further reinforcing the underlying benign trajectory, said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank.

"While we see a pause by the RBI in the upcoming policy, we do see some scope for rate cuts worth 25-50 basis points opening up from December policy, if downside risks to growth materialise and the Fed moves ahead with aggressive rate cuts,” Bhardwaj said.

• Cereal inflation fell to 2.7% in August compared to 3.3% in July.

• Meat and fish prices rose by 1.5% compared to a decline of 0.6% in the previous month.

• The inflation rate for milk and milk products was at 2.6% compared to 2.7% in the previous month.

• Clothing and footwear inflation was at 2.3% compared to 2.5% a month ago.

• Housing inflation was at 3.2% compared to 3.1% the preceding month.

• Fuel and light inflation was at 2.4% compared to 2.7% in July.