New Delhi: Retail inflation shot up to nearly 2 year high of 6.07 per cent in July, well above the RBI's comfortable level, on surge in prices of food items as demand for sugar, oil & fats and spices rose ahead of the festival season.
Retail inflation, based on Consumer Price Index (CPI) was 5.77 percent in June. In July 2015, it was at 3.69 percent. Inflation was highest since September 2014, when it was at 6.46 percent.
Food inflation during the month rose to 8.35 per cent, up from 7.79 percent in June.
Government has put inflation targeting at 4 percent with a range of plus/minus 2 percent for next five years under the new monetary policy framework agreement with the Reserve Bank.
In July, sugar and confectionery inflation rose to 21.91 percent (against 16.79 percent in June); oil and fats to 4.96 percent and spices to 9.04 percent.
There was an uptick in prices of cereals and products with inflation standing at 3.88 percent, while that for eggs shot up to 9.34 percent (against 5.51 percent).
Milk and products, also used as key ingredient for making eatables during festival, saw inflation rising to 4.13 percent in July (from 3.43 percent).
Starting August, various festivals are celebrated in different parts of the country leading to higher sales of commodities ranging from sweets, fruits and food items.
Inflation in fruits, vegetables and pulses was 3.53 percent, 14.06 percent and 27.53 percent respectively.
CPI inflation for urban sector was 5.39 percent in July, while that for rural segment it was 6.66 percent.