ECONOMY
July CPI inflation plunges to 3.54% on a high base effect of year-ago period
- IBJ Bureau
- Aug 13, 2024
Retail inflation in July eased to 3.54 per cent, marking a sharp decline after it rose in the previous month. With this, retail inflation has fallen below the RBI’s medium-term target of 4 per cent.
Data released by the government suggested that retail inflation has reached its lowest level in five years.
However, the low July 2024 Consumer Price Index (CPI) numbers were mainly because of a statistical effect of a high base CPI inflation in the corresponding year-ago period. In July 2023, the CPI inflation was hovering at a 15-month high of 7.44 per cent.
“There is sharp decline in the year-on-year inflation rate based on the All India Consumer Price Index (CPI) number for the month of July 2024, which is the lowest in the last 59 months,” the government’s press release has said.
“Year-on-year inflation rate based on All India Consumer Price Index (CPI) number is 3.54 per cent (provisional) for the month of July 2024. Corresponding inflation rate (sic) for rural and urban is 4.10 and 2.98 per cent, respectively,” it has added.
The sharp drop in July comes after retail inflation had hit a four-month high of over 5 per cent in June 2024.
One of the major contributing factors behind the sharp drop in July was food inflation, which was the lowest since June 2023.
During the month, inflation decreased across all food groups, with a notable drop in the prices of vegetables, fruits and spices.
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