Retail Inflation: India’s retail inflation, measured by the Consumer Price Index (CPI), dropped to 3.65% in August 2024, marking a substantial fall compared to 6.83% in August 2023. This data, released on Thursday, September 12, 2024, reflects a combined figure for both rural and urban areas, although the inflation rate has slightly risen by 110 basis points from July 2024’s 3.54%.
This is the second time in nearly five years that overall retail inflation has slipped below the Reserve Bank of India‘s (RBI) 4% target. The RBI aims to maintain inflation within a 2-6% band, with 4% as the central target. The last time this target was achieved was in July 2024.
Urban vs Rural Retail Inflation in August 2024
In urban regions, retail inflation fell to 3.14% in August 2024, a sharp decline from 6.59% in August 2023. Rural areas saw inflation drop to 4.16% in August 2024, compared to 7.02% in the same month last year.
Food Inflation Trends
The Consumer Food Price Index (CFPI), which tracks changes in food prices, also decreased, from 9.94% in August 2023 to 5.66% in August 2024. Both the urban and rural food inflation rates were significantly lower than those of the previous year, with urban food inflation falling to 4.99% and rural food inflation reaching 6.02%.
Among food items, tomatoes saw the steepest decline, with a year-on-year inflation rate of -47.91%, and a month-on-month drop of 28.8%. In contrast, vegetables showed the highest inflation rate of 10.71%, with urban and rural areas both experiencing this increase equally.
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