Inflation cools, exports revert to double digit mark

After retail prices, the wholesale inflation on Tuesday cooled to 5.09% in July helped by cheaper food, vegetable and fruits.

The country's exports too got a traction in July which registered a double digit growth of 14.32% to $25.77 billion.

Growth was registered across the sectors from engineering goods, petroleum products, gems and jewellery, organic and inorganic chemicals and drugs and pharmaceuticals. All of these registered a high export growth in July.

At least 21 out of 30 major product groups were in positive export territory during July 2018. Besides petroleum, gems and jewellery, and engineering goods, organic and inorganic chemicals, electronic goods, plastic and linoleum and drugs and pharmaceuticals registered positive exports growth during the month.

But high imports in July played a spoilsport. Imports rose 28.81% to $43.79 billion, taking the trade deficit to a high of 18.02 billion in the month under review.

Gold imports in July moved up to 40.94% to $2.10 billion.

On inflation front, food prices declined 2.16% in July against a rise of 1.8% in June, the government data said. Similarly, vegetable prices fell by 14.07% in the month under review as compared to a growth of 8.12% in June.

Fruit prices fell 8.81% in July as against a rise of 3.87% in the preceding month. Pulses prices declined 17.03%.

In the non-food category, the inflation in July increased to 3.96% as against 3.81% in the previous month.

On Monday, the government data showed retail inflation came at a nine-month low of 4.17%. The move is expected to give the much-needed relief to the Reserve Bank of India which tracks retail inflation for the purpose of interest rate determination.

However, Tuesday's rupee fall to more than 70 against a dollar is expected to exert further pressure on inflation in the coming months as it will render import, especially of crude oil, costlier. India imports more than 80% of its crude oil requirements.

 

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Inflation cools, exports revert to double digit mark

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