Adverse weather, including delayed monsoons and heavy rainfall, has led to higher vegetable prices may lead to further rate hikes and slow down economic growth | Latest News India
Even as the finance ministry expects CPI numbers to cool down going ahead, the government will continue to take more steps to contain inflation but avoid any knee-jerk reactions, Somanathan told Moneycontrol in an interview.
Retail inflation soared past estimates to a 15-month high of 7.44% in July from 4.9% in June, due to a jump in prices of vegetables, as well as pulses, spices, and cereals
The comments in the monthly State of the Economy article come amid a sharp rise in headline retail inflation driven by an eye-watering jump in prices of vegetables on account of supply-side issues
"The vulnerability of the economy to recurring incidence of vegetable price shocks, especially ahead of and during the monsoon, warrants major reforms in perishable supply chains covering transportation networks, warehousing and storage technologies, and value addition processes that damp the amplitude of these swings," the central bank report said.