New Delhi: Official data released on Thursday showed that retail inflation rose slightly to 3.65 percent in August, with vegetables and pulses experiencing price increases in the double digits. For the second consecutive month, retail inflation based on the Consumer Price Index (CPI) was lower than the Reserve Bank's target of 4 percent. In July, it hit a record low of 3.6 per cent after five years. In August 2023, the headline inflation rate was recorded at 6.83 percent.
According to the National Statistical Office (NSO), the All India Consumer Price Index (CPI) for August 2024 shows the second lowest year-on-year inflation rate (3.65 per cent) in the past five years. NSO data showed that vegetable prices rose by 10.71 percent, while 'pulses and products' saw an inflation rate of 13.6 percent.
The Consumer Price Index showed a decrease in spices (-4.4 per cent) and 'oils and fats' (-0.86 per cent). The general inflation in food prices stood at 5.66 pc, slightly above the 5.42 pc recorded in the previous month. In August 2024, the food inflation rate is only higher than in June 2023. According to NSO, 'tomato' showed the smallest annual inflation rate (-47.91 pc) and the lowest monthly change in index (-28.8 pc) at the item level.
The inflation rate for the 'fuel and light' sector also stood at -5.31 percent. The information indicated that urban centers had a retail inflation rate of 3.14 per cent while rural areas had a rate of 4.16 per cent. Bihar experienced the highest inflation rate of 6.62 per cent, while Telangana had the lowest at 2.02 per cent. The RBI has been assigned by the government to maintain inflation at 4 per cent, with a range of 2 per cent in both directions. Inflation has stayed under 6 percent.
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.
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