Lower Food Prices Bring Relief; Retail Inflation at 5-Month Low

  • by THO
  • 1 week ago
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By Malvika Gurung

Investing.com — The retail inflation as measured by the (CPI) tumbled down to 4.35% in September 2021, from 5.3% in August, reported the National Statistical Office on Tuesday.

In conjunction with the sharp decline in retail inflation, the index of (IIP) continued to grow significantly at 11.9%, recording a swift rise for the sixth consecutive month in August 2021. 

The sharp decline in retail inflation for the fifth consecutive month comes as the prices of some food products significantly slide down. The food price index tumbled below 1% to 0.68% in September 2021, a major downfall from 3.1% in August.

The retail inflation was as high as 7.3% in September 2020, in comparison to which, the rural inflation for the same period this year is recorded at 4.1% and urban at 4.6%.

As the industrial production index continues to soar in double digits, ‘much-needed relief about activities touching pre-Covid levels persist amid economists. The number recorded for August is marginally higher than the 11.5% IIP recorded in July.

Furthermore, a drop in prices of food products like fruits, vegetables, eggs, meat, and fish has led to a reduction in retail inflation. The figures had reached as high as 6.3% in May 2021, as a result of supply chain disruption caused due to the second wave of the Covid-19 pandemic.

Although the NSO has reported improving results/figures of retail inflation and IIP, experts notify of certain pressure points that must be administered.

For instance, despite an annual fall of 22.5% in the prices of vegetables in September, the prices of oils and fats spiked by 34.2% for this period, along with a 13.6% rise in fuel and light (in September), which are consequent to rising fuel prices in the country.

 



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