• MEYO

Retail inflation to come down with easing of lockdowns.

There are fears that retail inflation would remain at an elevated level during the rest of the year limiting the scope for the RBI to further ease the benchmark interest rate.


According to the government data, retail inflation rose to 6.93 per cent in July, mainly driven by rising prices of food items like vegetables, pulses, meat and fish.


As far as growth is concerned, India’s economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment.




Manufacturing shrank 39.3 per cent, construction contracted 50.3 per cent, mining output fell 23.3 per cent, and electricity and gas segment dropped 7 per cent. The latest print of factory output is also not encouraging as the Index of Industrial Production (IIP) contracted by 10.4 per cent in July mainly due to lower output of manufacturing, mining and power generation. This is the fifth consecutive monthly decline.