New Delhi, Sep 14 (IANS) Retail inflation rose to 4.82 per cent in August from 4.5 per cent in July, driven primarily by higher food prices, while core inflation also edged up, CareEdge Ratings Chief Economist Rajani Sinha said on Monday, warning that the inflation outlook remains vulnerable to weather-related and external risks.

According to Sinha, core inflation increased marginally to 4.4 per cent in August from 4.2 per cent in July, although core inflation excluding precious metals remained relatively benign at 3.3 per cent. The rise in headline inflation was largely attributed to higher food prices across several categories, including sugar, rice, edible oil and select vegetables such as onions.

The Consumer Price Index (CPI) recorded a year-on-year increase of 4.82 per cent in August 2026, according to data cited by industry body PHDCCI. Food inflation rose to 5.66 per cent in August from 5.52 per cent in July, while rural food inflation was higher at 6.13 per cent.

Among key food items, ginger, onion and garlic recorded particularly sharp price increases of 73.82 per cent, 48.27 per cent and 43.60 per cent, respectively. Tomato and potato, however, provided some relief, with prices declining 31.09 per cent and 13.14 per cent, respectively, during the month.

Sinha said onion prices have been affected by delayed new plantings following a late monsoon, which has postponed the arrival of the new harvest in markets. Sugar prices have also come under pressure due to lower-than-expected sugarcane yields and a shift towards ethanol production, which has tightened domestic availability.

The increase in food prices is also adding to costs across the food and beverage industry. PHDCCI President Rajeev Juneja said that with staple food prices rising sharply, cost pressures on food processing, restaurants and other related services are likely to become more pronounced.

Inflation was also elevated in the personal care, social protection and miscellaneous goods and services category, which recorded inflation of 15.21 per cent in August. The increase was primarily driven by higher jewellery prices amid a rise in global gold and silver prices. Silver jewellery prices surged 107.11 per cent, while gold, diamond and platinum jewellery prices rose 35.53 per cent.

PHDCCI SG & CEO Ranjeet Mehta said sustained high prices of precious metals could weigh on demand during the upcoming festival and wedding season.

CareEdge Ratings expects CPI inflation to peak in the third quarter of FY27 and average around 5 per cent during FY27. On monetary policy, Sinha said the Reserve Bank of India’s Monetary Policy Committee is likely to remain data-dependent, with its decisions guided by evolving growth and inflation dynamics.

“A sustained uptick in inflation could strengthen the case for a rate hike in the coming months,” Sinha said, adding that the October RBI policy decision will be closely watched as major global central banks have already begun moving towards tighter monetary policy.

--IANS

pk