Economy / Retail inflation eases to 5.30% in August compared to 5.59% in July

New Delhi: India's retail inflation in the month of August held steady, with marginally easing to 5.30%Retail inflation in August eases to 5.30%, staying within Reserve Bank of India's comfort zone for a second month, government data showed on Monday.

The RBI has been mandated by the government to keep retail inflation at 4% with a margin of 2% on either side.

Data released by National Statistics Office(NSO) showed food inflation decelerated to 3.11% in August from 4% in July as vegetable prices contracted 11.7% during the month. However, fuel and light inflation remained elevated at 12.95% while services inflation also remained high at 6.4% in August.

Last month, the central bank held its monetary policy loose, but cited concerns about inflationary pressures on the economy.

Despite the devastation of the second wave of the coronavirus, India's economy grew at its fastest ever rate in the June quarter, supported by a low base of a record contraction a year earlier and a strong rebound in manufacturing.

The RBI also kept its growth forecast at 9.5% for this fiscal year.

Industrial production surged 11.5% in July mainly due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained slightly below the pre-pandemic level.

The manufacturing sector, which constitutes 77.63% of the Index of Industrial Production (IIP), grew 10.5% in July, according to the data released by the National Statistical Office (NSO) on Friday.