India's Retail Inflation Slightly Shoots Up To 3.65 Per Cent In August

India's Retail Inflation: Food inflation, which makes up about half of the Consumer Price Index basket, increased to 5.66 per cent in August, compared to a 13-month low of 5.42 per cent in July

India's retail inflation rose to 3.65 per cent year-on-year (YoY) in August, up from a five-year low of 3.54 per cent, according to data released on Thursday, second-lowest in the past five years. The inflation also was below 4 per cent in July. Corresponding inflation rates for rural and urban are 4.16 per cent and 3.14 per cent, respectively.

Food inflation, which makes up about half of the Consumer Price Index (CPI) basket, increased to 5.66 per cent in August, compared to a 13-month low of 5.42 per cent in July, the data revealed by Ministry of Statistics & Programme Implementation.

According to NSO data, inflation in the spices, meat and fish, and pulses and products' categories saw a decline. For August 2024, food inflation was the second-lowest since June 2023, with the YoY rate for the All India Consumer Food Price Index (CFPI) provisionally at 5.66 per cent. Rural and urban inflation stood at 6.02 per cent and 4.99 per cent, respectively. At the item level, tomato showed the steepest YoY deflation at -47.91 per cent, with a month-on-month decrease of -28.8 per cent.

The country's headline inflation remains within the RBI's tolerance band of 2-6 per cent. However, it continues to diverge from the central bank's medium-term goal of achieving a "durable 4 per cent," as highlighted by Governor Shaktikanta Das. This signals ongoing challenges in stabilising inflation at the desired level despite short-term compliance with the broader range.

Price data are gathered weekly from 1,114 urban markets and 1,181 villages across all states/UTs through personal visits by field staff from the Field Operations Division of NSO, MoSPI. In August 2024, prices were collected from 100 per cent of villages and 98.6 per cent of urban markets, with market-wise reporting rates of 88.3 per cent for rural areas and 92.4 per cent for urban areas.

The next CPI release, for September 2024, is scheduled for Monday, October 14, 2024.

IIP rises to 4.8% in July 

In July, the increase in growth within the Index of Industrial Production (IIP) was driven by a 4.8 per cent acceleration in manufacturing. However, growth in mining and electricity decelerated, with increases of 3.7 per cent and 7.9 per cent, respectively. Additionally, growth declined in three out of six use-based categories.