Inflation may have cooled off across most of India, but Kerala continues to stand out with the highest retail inflation rate in August. Latest data from the National Statistics Office (NSO) put the state’s inflation at 9.4%, far above the national average of 2.07%.
Among the 22 states and Union territories tracked, Kerala topped the chart with a rate of over 9%. Karnataka followed with 3.8%, while flood-hit Punjab recorded 3.5%. In comparison, the rest of the country largely saw benign price rises.
Soumya Kanti Ghosh, group chief economic adviser at SBI, called Kerala’s case “the most interesting outlier”. He pointed out that rural inflation in the state was 10.1% and urban inflation stood at 7.2%.
According to Ghosh, the main driver has been the oils and fats component of the consumer price index. In Kerala, the sharp rise in coconut oil prices has dominated the inflation trend, with climate-linked pressure on production adding to the squeeze.
Another unique factor is Kerala’s higher weightage for personal care in the CPI basket, which includes gold. With gold prices climbing, that too has pushed the state’s inflation numbers higher.
Kerala has now topped the inflation chart for eight months in a row. The BJP state leadership seized on the data to slam the Left-led state government.
BJP state president Rajeev Chandrasekhar accused the Pinarayi Vijayan administration of economic mismanagement. He said while the Central government has kept inflation below the Reserve Bank of India’s 4% target, Kerala’s inflation has continued to spiral.