Retail inflation drops to five-year low of 3.54 per cent in July, falls below RBI's target

Retail inflation in India has plummeted to its lowest level in nearly five years, registering at 3.54% for July 2024, according to data released by the government today. This figure is notably below the Reserve Bank of India's (RBI) target of 4% inflation, marking a significant decrease from 7.44% in July 2023.

The sharp decline in inflation is attributed to easing price pressures across both rural and urban areas. Urban inflation fell to 2.98% in July 2024, down from 7.20% a year ago, while rural inflation decreased to 4.10% from 7.63% during the same period.

Food inflation has also seen substantial relief. The Consumer Food Price Index (CFPI), which measures food inflation, fell to 5.42% in July 2024, a notable drop from 11.51% in July 2023. Among food items, spices recorded the lowest inflation rate at -1.43%, followed by oils and fats at -1.17%. Non-alcoholic beverages experienced a modest increase of 2.29%.

Conversely, pulses experienced the highest inflation, surging by 14.77% year-on-year, with cereals and vegetables also seeing significant price rises of 8.14% and 6.83%, respectively.

State-wise data reveals Bihar with the highest combined inflation rate at 5.87%, while Jharkhand reported the lowest at 1.72%. Delhi and Chhattisgarh also posted low inflation rates at 2.06% and 2.16%, respectively.