Retail inflation in August inched up to 3.65 per cent, though vegetables and pulses witnessed price rise in double digits, according to official data released on Thursday.
Photograph: Danish Siddiqui/Reuters
The retail inflation based on the Consumer Price Index (CPI), however, remained below the Reserve Bank’s median target of 4 per cent for the second month in a row.
It was at a five-year low of 3.6 per cent in July.
The headline inflation was 6.83 per cent in August 2023.
“Year-on-year inflation rate (3.65 per cent) based on All India Consumer Price Index (CPI) for the month of August, 2024, is second lowest in the last five years,” National Statistical Office (NSO) said.
According the data released by NSO, inflation in vegetables was 10.71 per cent and in ‘pulses and products’ at 13.6 per cent.
The CPI was in negative in case of spices (-4.4 per cent) and ‘oils and fats’ (-0.86 per cent).
The overall inflation in the food basket was at 5.66 per cent, marginally higher than 5.42 per cent in the preceding month.
Food inflation for August 2024 is the second lowest since June 2023.
“At item level, ‘tomato’ has exhibited the lowest year on year inflation (-47.91 per cent) as well as lowest MoM change in index (-28.8 per cent),” NSO said.
Inflation in case of ‘fuel and light’ segment too was in negative at (-) 5.31 per cent.
The data showed that retail inflation was at 3.14 per cent at urban centres and 4.16 per cent in rural areas.
The highest inflation was in Bihar at 6.62 per cent and lowest in Telangana at 2.02 per cent.
The government has tasked the RBI to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side. Inflation has remained below 6 per cent since September 2023.
Commenting on the data, Aditi Nayar, chief economist, ICRA, said that with the base effect normalising, “we anticipate a sharp pickup in the CPI inflation to about 4.8 per cent in September 2024, and range between 4.4 per cent and 4.7 per cent in H2 FY2025”.
“Although the core-CPI inflation eased slightly to 3.5 per cent in August 2024 from 3.6 per cent in July 2024, this is likely to be an intermittent dip; we expect the core CPI inflation print to inch up through the rest of the fiscal, in spite of the recent moderation in commodity prices, on account of demand for services, as well as the YoY decline in the sowing of cotton,” she said.
NSO collects the price data from selected 1,114 urban markets and 1,181 villages covering all states and UTs.
During August 2024, NSO collected prices from 100 per cent villages and 98.6 per cent urban markets.
