Low inflation doesn't signal demand slowdown: Analysts

Retail inflation falling to a over six-year low of 2.1% in June was largely due to the high base of last year, and did not denote a fall in aggregate demand, analysts said.

- PRASANTA SAHU

RETAIL INFLATION FALLING to a over six-year low of 2.1% in June was largely due to the high base of last year, and did not denote a fall in aggregate demand, analysts said.

Consumer Price Index (CPI) based inflation eased in June, primarily driven by disinflation in the food category. The increase in core inflation to 4.4% is also not worrying as it is mainly attributed to double-digit inflation in personal care items, which includes gold, the prices of which remain elevated.

Meanwhile, wholesale price inflation slipped into deflationary territory, contracting by 0.1% in June, largely due to deflation in food as well as fuel and power.