The Inflation Conundrum

NEW DELHI: Last month retail inflation surged to a 10-month high of 7.4 percent in July. This spurt was led by rising prices of vegetables—tomato prices was the outlier, growing by 201 percent, compared to a decline of 34 percent in the same month last year. At the same time, core inflation slowed to 4.9 percent in July from 5.2 percent in June. Clearly, this current bout of inflation has left vegetarians angry, pleased producers and put incumbent politicians readying for elections on the edge. To understand the evolving nature of inflation and more we spoke to Dharmakirti Joshi, Chief Economist, CRISIL Limited.