Retail inflation inched up to 7.96 per cent in July, mainly due to higher prices of food items such as vegetables, fruits and milk.
Retail inflation measured on consumer price index (CPI) in June was 7.46 per cent (revised upwards from 7.31 per cent). It was at 9.64 per cent in the same month a year ago.
Food inflation in July this year rose to 9.36 per cent as against 7.97 per cent in June, according to the government data released today.
Vegetables were costlier in July with a double-digit price rise of 16.88 per cent, a steep rise from 8.73 per cent in June.
Fruit prices went up to 22.48 in July as against 20.64 per cent in June.
The rate of price rise in pulses was 5.85 per cent.
Inflation in milk and milk products stood at 11.26 per cent during the month under review.
Amongst others, food and beverages saw a prices rise of 9.16 per cent and non-alcoholic beverages prices at 6.35 per cent.
Inflation in cereals, however, eased marginally in July to 7.45 per cent as against 7.6 per cent in the previous month.
Other protein rich items such as eggs, fish and meat too witnessed lower inflation in July over the previous month.
Inflation in rural and urban areas in July was 8.45 per cent and 7.42 per cent, respectively. In June, it was 7.87 per cent and 6.82 per cent.
Commenting on the data, Samiran Chakraborty, Head of Research, Standard Chartered Bank (India), said the trend witnessed in prices is not comforting.
INDRANIL PAN, CHIEF ECONOMIST, KOTAK MAHINDRA BANK LTD
"Industrial production was weaker than the previous month but with consumer durables contracting sharply and capital goods rebounding sharply. These numbers are a bit difficult to digest as we have not really seen too much of an investment activity immediately and hence capital goods rising by ~23% remains a surprise. The bigger data for the day is the CPI inflation that has surpassed street expectations with a ~8% reading and also with the core CPI remaining sticky at ~7.4%. Our inflation model predicts that even as Headline CPI could be on the lower side in the next few months, the base effect advantage vanishes beyond November 2014. After this, Headline CPI inflation could again climb and there appears to be some risk for it to be very close to 8% for January. In such