The recent price spike of certain food items is expected to be “transitory” and food inflation is expected to moderate in the coming months, but global uncertainty and domestic disruptions may keep inflationary pressures elevated for the coming months, warranting greater vigilance by the government and the Reserve Bank of India (RBI), the Finance Ministry said on Tuesday. In its monthly economic review for July, the ministry said that the government has already taken pre-emptive measures to restrain food inflation which, along with the arrival of fresh stock, is likely to subside price pressure in the market soon. The ministry said tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early September. Also, enhanced imports of tur dal are expected to moderate pulses inflation, it said.
Retail inflation based on the Consumer Price Index (Combined) surged to a 15-month high of 7.44 per cent in July 2023, primarily due to higher prices of vegetables, cereals, pulses, and milk and products. Core inflation — non-food, non-fuel segment of inflation — was at a 39-month low of 4.9 per cent.