Business News: India’s retail inflation rate, which is based on the Consumer Price Index (CPI), has come down to 3.54 per cent in July 2024. This figure is the lowest in the last 59 months and the lowest since August 2019, when the inflation rate was 3.21 per cent. The rate was at 5.08 per cent in June, while it was at 4.75 per cent and 4.85 per cent in May and April respectively.
Reduction in prices of food items
According to the Ministry of Statistics and Program Implementation, the main reason for the reduction in retail inflation in July is the fall in the prices of food items. According to the ministry’s data, food inflation, which accounts for about half of the CPI basket, has come down to 5.42 per cent in July. It was 9.36 per cent in June and 11.51 per cent in July 2023. However, vegetable prices have seen a rise of 6.83 per cent year-on-year in July, as against 29.32 per cent in June.
Urban and rural inflation also reduced
Inflation in urban areas has come down from 4.39 per cent to 2.98 per cent on a month-on-month basis in July. Similarly, rural inflation has come down from 5.66 per cent to 4.10 per cent. This decline reflects the stability of prices in both urban and rural areas and indicates an improvement in the standard of living.
RBI forecast
Reserve Bank of India (RBI) Governor Shaktikanta Das had recently projected the CPI-based retail inflation rate to be 4.4 per cent in the second quarter of the current financial year 202425 after the Monetary Policy Committee (MPC) meeting. This estimate is close to the Reserve Bank’s target range of 2-6 per cent and is a positive sign towards controlling inflation.
Conclusion
This decline in the retail inflation rate of July 2024 is a positive sign for the Indian economy. The reduction in the prices of food items and the reduction in the inflation rate in urban and rural areas can prove to be an important step towards economic stability.