India’s Imported Inflation Reaches New Heights
September 2024 Sees Significant Increase
In September 2024, India’s imported inflation reached a 13-month high, growing by 2%, as reported by the State Bank of India (SBI). This rise is largely due to increased prices of gold, oils and fats, and chemical products. Imported inflation refers to the rise in domestic prices due to higher costs of imported goods.
Gold Imports Surge
Gold imports in September 2024 were valued at USD 10.06 billion, a significant increase from USD 4.94 billion in the same month last year. This marks the highest gold import value from January to September this year. In August 2024, gold imports increased by 103.7% in value, while the April-August period saw a 25.2% growth. However, in volume terms, gold imports showed a mixed trend, with a 62.24% rise in August but a 2.18% decline for the April-August period.
Overall Inflation on the Rise
India’s overall inflation also increased, with retail inflation reaching a nine-month high of 5.5% in September 2024, up from 3.65% in August. This was mainly driven by a sharp rise in food prices, with food and beverages inflation surging to 8.36% in September. Vegetable prices significantly contributed to this increase, adding 2.34% to the overall inflation rate.
The growing share of imported inflation is adding pressure to the Indian economy, as global price changes in essential commodities like gold and edible oils directly affect domestic inflation levels.
Doubts Revealed
Imported Inflation -: Imported inflation happens when the prices of goods that a country buys from other countries go up. This can make things more expensive in the country that is buying these goods.
13-Month High -: A 13-month high means that the level of imported inflation is the highest it has been in the last 13 months. This is a way to compare how much prices have increased over a period of time.
Gold Imports -: Gold imports refer to the amount of gold that India buys from other countries. When the value of these imports is high, it means India is spending a lot of money on buying gold from abroad.
USD 10.06 billion -: USD 10.06 billion is the amount of money, in US dollars, that India spent on importing gold. This is a very large amount, showing how much gold India bought from other countries.
Retail Inflation -: Retail inflation is the increase in prices of goods and services that people buy for their daily needs. When retail inflation goes up, it means that everyday items are becoming more expensive for people to buy.
5.5% -: 5.5% is the rate at which retail prices have increased. This percentage shows how much more expensive things have become compared to before.
Global Price Changes -: Global price changes refer to the fluctuations in prices of goods and services around the world. These changes can affect how much things cost in India, especially if India imports those goods.