India s August Retail Inflation Above Economists Expectations at 3.65 YY

Customers buy fruits and vegetables at an open air evening market in Ahmedabad, India, August 21, 2023. (REUTERS/Amit Dave)

NEW DELHI (Reuters) -India's August retail inflation was slightly higher than economists' expectations, on the back of a sharp rise in vegetable prices, according to government data released on Thursday.

Annual retail inflation was 3.65% in August, compared with a revised 3.60% in July. Economists polled by Reuters had forecast August inflation at 3.5%.

India's key inflation gauge slipped below the Reserve Bank of India's target of 4% in July after a gap of nearly five years, largely due to the high-base effect.

Prices of food, which account for nearly half of the retail inflation, rose 5.66% in August, compared to a 5.42% rise in the previous month.

Vegetable prices rose 10.71% year-on-year in August against a 6.83% rise in the previous month.

(Reporting by Sarita Chaganti Singh; Editing by Mrigank Dhaniwala)