Retail Inflation in July eases to 3.54%, hits five-year low

Retail inflation in India saw a significant drop in July 2024, easing to 3.54%, according to data released by the government. This marks a sharp decline from the previous month's figures and brings the inflation rate below the Reserve Bank of India's (RBI) medium-term target of 4%.

The data indicates that this is the lowest level of retail inflation recorded in the last five years. "There is a sharp decline in the year-on-year inflation rate based on the All India Consumer Price Index (CPI) number for July 2024, which is the lowest in the last 59 months," stated the government's press release.

The inflation rate for rural and urban areas stood at 4.10% and 2.98%, respectively, for July 2024. This drop comes after retail inflation had climbed to a four-month high of over 5% in June 2024. A major factor behind this sharp decrease in July was the significant reduction in food inflation, which hit its lowest point since June 2023. Prices across all food groups, including vegetables, fruits, and spices, saw a notable decline.

In July 2024, the year-on-year inflation rate based on the All India Consumer Food Price Index (CFPI) was provisionally 5.42%. For rural areas, the CFPI was 5.89%, while in urban areas, it was 4.63%.