India’s Retail Inflation Falls to 3.65% in August 2024, Meeting RBI’s 4% Target: Government Data
India’s retail inflation fell to 3.65% in August 2024, dipping below the Reserve Bank of India’s (RBI) 4% target for the second time in nearly five years, according to the Consumer Price Index (CPI) data released on Thursday, September 12, 2024. This marks a significant reduction from 6.83% in August 2023. However, inflation rose slightly from 3.54% in July 2024.
India’s retail inflation fell to 3.65% in August 2024, dipping below the Reserve Bank of India’s (RBI) 4% target for the second time in nearly five years, according to the Consumer Price Index (CPI) data released on Thursday, September 12, 2024. This marks a significant reduction from 6.83% in August 2023. However, inflation rose slightly from 3.54% in July 2024.
Inflation Overview
The RBI’s inflation target is 4%, with a tolerance band of +/- 2%, meaning inflation should remain within the range of 2% to 6%. August 2024’s inflation reading at 3.65% shows a return to this range after fluctuating figures earlier in the year.
Urban and Rural Inflation Rates
In August 2024, urban inflation was recorded at 3.14%, a considerable drop from 6.59% in August 2023. Meanwhile, rural inflation also saw a significant decline, falling to 4.16% from 7.02% in the same period last year.
Food Inflation
Food prices, a crucial component of overall inflation, also showed improvement. The Consumer Food Price Index (CFPI) indicated a combined food inflation rate of 5.66% in August 2024, down from 9.94% in August 2023.
- Urban food inflation stood at 4.99%, down from 10.42% in August 2023.
- Rural food inflation was slightly higher, at 6.02%, compared to 9.67% in the previous year.
Key Drivers: Tomatoes and Vegetables
Tomatoes experienced the most dramatic price drop, with a year-on-year deflation of 47.91% and a month-on-month decline of 28.8%. Meanwhile, vegetable prices rose by 10.71% overall, with both urban and rural areas experiencing equal inflation at 13.22%.
The decline in inflation, especially food inflation, is seen as a positive sign for the Indian economy. However, the slight month-on-month rise from July indicates that inflationary pressures persist, particularly in the food sector. The RBI will continue monitoring inflation trends closely to ensure price stability within its target range.
Sources By Agencies
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