Business News
3 min read | Updated on September 12, 2024, 20:23 IST
SUMMARY
The government has tasked the RBI to ensure inflation remains at 4 percent with a margin of 2 percent on either side. Inflation has remained below 6 percent since September 2023.
The overall inflation in the food basket was at 5.66 percent, marginally higher than 5.42 percent in the preceding month
Retail inflation in August inched up to 3.65 percent, though vegetables and pulses witnessed price rise in double digits, according to official data released on Thursday.
The retail inflation based on the Consumer Price Index (CPI), however, remained below the Reserve Bank's median target of 4 percent for the second month in a row. It was at a five-year low of 3.6 percent in July. The headline inflation was 6.83 percent in August 2023.
"Year-on-year inflation rate (3.65 percent) based on All India Consumer Price Index (CPI) for the month of August, 2024, is the second lowest in the last five years," National Statistical Office (NSO) said.
According to the data released by NSO, inflation in vegetables and 'pulses and products' was 10.71 percent and 13.6 percent respectively.
The CPI was negative in the case of spices (-4.4 percent) and 'oils and fats' (-0.86 percent).
The overall inflation in the food basket was at 5.66 percent, marginally higher than 5.42 percent 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 percent) as well as lowest MoM change in index (-28.8 percent)," NSO said.
Inflation in the case of the 'fuel and light' segment too was negative at (-) 5.31 percent.
The data showed that retail inflation was at 3.14 percent in urban centres and 4.16 percent in rural areas.
The highest inflation was in Bihar at 6.62 percent and the lowest in Telangana at 2.02 percent.
The government has tasked the RBI to ensure inflation remains at 4 percent with a margin of 2 percent on either side. Inflation has remained below 6 percent 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 percent in September 2024, and range between 4.4 percent and 4.7 percent in H2 FY2025".
"Although the core-CPI inflation eased slightly to 3.5 percent in August 2024 from 3.6 percent 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 percent villages and 98.6 percent urban markets.
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