September 13, 2024
New Delhi, India
India’s Retail Inflation
Retail inflation in India edged up to 3.65% in August 2024, according to data released by the National Statistical Office (NSO) on Thursday. Despite the slight increase, inflation remained below the Reserve Bank of India’s (RBI) median target of 4% for the second consecutive month.
Key Highlights:
- CPI Inflation: 3.65% in August, up from a five-year low of 3.6% in July.
- Vegetables and Pulses: Inflation surged to 10.71% and 13.6%, respectively.
- Food Basket: Overall inflation rose marginally to 5.66%, up from 5.42% in the previous month.
- Negative Inflation: Notable deflation was observed in spices (-4.4%) and ‘oils and fats’ (-0.86%).
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Regional and Category Insights:
- Urban vs Rural: Inflation stood at 3.14% in urban areas and 4.16% in rural regions.
- Highest Inflation: Bihar recorded the highest inflation at 6.62%.
- Lowest Inflation: Telangana saw the lowest inflation rate at 2.02%.
Detailed Observations:
- Tomato Prices: Experienced the lowest year-on-year inflation at -47.91% and the lowest month-on-month change at -28.8%.
- Fuel and Light Segment: Recorded a deflation of -5.31%.
Inflation Target and Future Outlook:
The RBI is mandated to keep inflation at 4%, with a margin of 2% on either side. Inflation has remained below 6% since September 2023, indicating relative stability in price levels despite some fluctuations in food categories.
While inflation in certain food categories remains elevated, the overall inflation rate is within the acceptable range set by the RBI, which may influence the central bank’s monetary policy decisions moving forward.
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