Inflation Surges to 7.44% in July, Highest in 15 Months

Inflation in India surged to 7.44% in July, the highest in 15 months, as prices of food items, especially vegetables, continued to rise. This is the second consecutive month that inflation has been above the Reserve Bank of India’s (RBI) comfort level of 6%.

The Consumer Price Index (CPI)-based inflation was 4.87% in June. In July 2022, it was 6.71%.

The rise in inflation was mainly due to a sharp increase in food prices. The CPI food inflation rose to 11.51% in July, from 4.55% in June.

Vegetable prices rose 37.3% in July, while cereals and pulses became over 13% costlier.

The inflation in rural areas was higher at 7.63%, while it was 7.2% in urban areas.

The RBI is likely to raise interest rates in its next monetary policy review in September to tame inflation.

The surge in inflation is a major concern for the government and the RBI. It will put pressure on the government to increase spending on subsidies and welfare programs to protect the poor and vulnerable from the impact of inflation.

The RBI is also likely to take steps to tighten monetary policy to slow down the economy and bring down inflation. This could lead to a slowdown in economic growth.

The government and the RBI will need to take coordinated action to address the inflation problem. They will need to increase spending on subsidies and welfare programs, while also tightening monetary policy. This will be a difficult balancing act, but it is essential to prevent inflation from getting out of control.