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Inflation accelerates to 6.93%
Why is it in news?
- Retail inflation spiked to 6.93 per cent in July, despite a purported Covid-induced demand compression in the economy.
- The inflation remained above the RBI’s medium-term target for a tenth straight month.
- The RBI’s medium-term inflation target is set at 4%.
Details:
- The price pressure was mostly aided by dearer food articles (price hike in food items).
- This suggests supply disruptions may have more than offset any demand destruction in the economy following the COVID-19 pandemic.
Monsson Relief:
- Monsoon rains are expected to be 104% of a long-term average in August and September.
- This indicating bumper harvests and helping to alleviate some of the economic damage caused by the novel coronavirus pandemic.