New Delhi, September 12 (Language) Retail inflation rose to 3.65 percent in August, according to official data released on Thursday, although the prices of vegetables and pulses recorded a double-digit increase.
However, retail inflation based on the Consumer Price Index (CPI) remained below the Reserve Bank’s average target of 4 percent for the second consecutive month. It was at a five-year low of 3.6 percent in July. Core inflation was 6.83 percent in August 2023.
“The year-on-year inflation rate (3.65 percent) based on the All-India Consumer Price Index (CPI) for the month of August, 2024 is the second lowest in the last five years,” the National Statistical Office (NSO) said.
According to data released by the CSO, inflation in vegetables stood at 10.71 percent and in pulses and products it stood at 13.6 percent.
CPI was negative in case of spices (-4.4 percent) and ‘oils and fats’ (-0.86 percent).
The overall inflation in food articles stood at 5.66 percent, marginally higher than 5.42 percent in the previous month.
Food inflation for August 2024 is the second lowest after June 2023.
“At the commodity level, ‘Tomato’ exhibited the lowest year-on-year inflation (-47.91 percent) as well as the lowest monthly change in the index (-28.8 percent),” the CSO said.
Inflation in the ‘fuel and light’ segment also remained negative at (-) 5.31 percent.
The data showed that retail inflation stood at 3.14 per cent in urban areas and 4.16 percent in rural areas.
The highest inflation was in Bihar at 6.62 percent and the lowest was in Telangana at 2.02 percent.
The government has tasked the RBI with ensuring that inflation remains at 4 percent, with a margin of 2 percent on either side. Inflation is to remain below 6 percent from September 2023.
Commenting on the data, Aditi Nayar, chief economist at ICRA, said that with base effects normalising, “we expect CPI inflation to rise sharply to around 4.8 percent in September 2024, and remain in the range of 4.4 percent to 4.7 percent in the second half of FY25.”
He said, “While core-CPI inflation has moderated slightly to 3.5 percent in August 2024 from 3.6 percent in July 2024, it is likely to witness intermittent decline; we expect the core CPI inflation print to remain elevated during the rest of the fiscal year, despite the recent moderation in commodity prices led by services demand and a year-on-year decline in cotton sowing.”
The NSO collects price data from selected 1,114 urban markets and 1,181 villages covering all states and union territories.
During August 2024, the NSO collected prices from 100 percent of villages and 98.6 percent of urban markets.
