August 12, 2024
New Delhi, India
CPI Data
In a significant development for India’s economy, the Consumer Price Index (CPI) inflation rate fell to 3.54% in July 2024, the lowest since August 2019, according to data released on August 12, 2024. The decline in retail inflation brings it well within the Reserve Bank of India’s (RBI) target of 4%. Alongside this, the Index of Industrial Production (IIP) recorded a growth of 4.2% in June 2024, indicating a strengthening industrial sector.
Key Highlights:
- CPI Inflation Overview: The CPI inflation in July 2024 stood at 3.54%, a sharp decline from 7.44% in July 2023 and 5.08% in June 2024. This marks the lowest inflation rate in nearly five years, bringing the rate below the RBI’s target for the first time in this period.
- Urban vs. Rural Inflation:
- Urban inflation decreased to 2.98% in July 2024, compared to 7.20% in July 2023.
- Rural inflation also showed a significant decline, falling to 4.10% from 7.63% in the same period last year.
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Food Inflation:
- Overall Food Inflation: The combined Consumer Food Price Index (CFPI), which measures food inflation, dropped to 5.42% in July 2024, down from 11.51% in July 2023. This is the lowest food inflation rate since June 2023.
- Lowest and Highest Inflation Rates Among Food Items:
- Lowest Inflation: Spices saw the lowest inflation rate at -1.43%, followed by oils and fats at -1.17%, and non-alcoholic beverages with a modest increase of 2.29%.
- Highest Inflation: Pulses experienced the highest inflation at 14.77% year-on-year, followed by cereals at 8.14%, and vegetables at 6.83%.
- Urban and Rural Food Inflation:
- Urban food inflation dropped significantly to 4.63% in July 2024, compared to 12.37% in July 2023.
- Rural food inflation also saw a decline, falling to 5.89% from 11.04% over the same period.
Industrial Production:
- IIP Growth: India’s Index of Industrial Production (IIP) recorded a growth of 4.2% in June 2024, reflecting positive trends in the industrial sector. This growth is a positive sign for the country’s manufacturing and industrial activities, contributing to the overall economic recovery.
The sharp decline in retail inflation to 3.54% in July 2024 and the growth in industrial production by 4.2% in June 2024 are encouraging signs for India’s economy. The reduction in food inflation and the overall CPI inflation rate falling within the RBI’s target range provide a stable outlook for consumers and policymakers alike. As the economy continues to recover, these trends indicate a balanced approach towards sustainable growth and price stability.
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