For the second consecutive month, retail inflation in India remained below the Reserve Bank of India's median target of 4 per cent in August, despite a slight increase to 3.65 per cent from an upwardly revised 3.6 per cent in July. It's the second slowest inflation rate in the last five years in August.
Although food inflation accelerated from July's 13-month low of 5.4 per cent to 5.7 per cent and crossed the 6 per cent threshold in rural India, unclear effects from last August, when retail prices increased 6.8 per cent, helped keep the inflation pace in check.
Consumer inflation in rural areas
Consumer inflation in rural areas increased slightly from 4.1 per cent in July to 4.16 per cent in August, compared to 3.14 per cent in urban areas. Overall, rural inflation was higher than that of urban consumers.
The Consumer Price Index (CPI) decreased 0.44 per cent month over month, while the Consumer Food Price Index remained unchanged. On a sequential basis, however, urban food prices fell 0.9 per cent while the rural food price index fell just 0.25 per cent.
Biggest price decline in tomato
The largest price decline was recorded for tomatoes, which decreased by 47.9 per cent on an annual basis and by 28.8 per cent on a monthly basis. According to the National Statistical Office, August saw the second-lowest level of food inflation in India since June 2023.
Vegetable inflation
Vegetable inflation surged back into double digits to hit 10.7 per cent in July after declining to 6.8 per cent in July, despite the respite in tomato prices.
Spice prices decreased 4.4 per cent from August of last year, but pulse inflation remained stable at 13.6 per cent, signifying the 15th consecutive month of price increases of 10 per cent or more.
Fruits and eggs
Fruit prices increased by 6.5 per cent, but egg prices increased by 7.14 per cent from 6.8 per cent in July. Cereals eased from over 8 per cent to 7.3 per cent in August, offering some respite.
