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Retail Inflation Declines to 59-month Low of 3.54 Per Cent in July

Retail Inflation Declines to 59-month Low of 3.54 Per Cent in July

Retail Inflation Declines to 59-month Low of 3.54 Per Cent in July

New Delhi: With the significant easing of food prices, consumer retail inflation declined to a 59-month low of 3.54 per cent in July, showing below the central bank’s targeted 4 per cent for the first time in nearly 5 years, while India’s industrial output slowed to a five-month low of 4.2 per cent in June 2024, mainly due to poor performance of the manufacturing sector, the two separate government data showed on Monday.

As per the data released by the National Statistical Office (NSO), the Consumer Price Index or CPI-based retail inflation was 5.08 per cent in June 2024, and 7.44 per cent in July 2023, while the last time inflation was seen below 4 per cent in September 2019. “Inflation in the food basket was 5.42 per cent in July, down from 9.36 per cent in June,” the NSO data showed.

The Centre has tasked the Reserve Bank of India (RBI) to ensure that the CPI inflation remains at 4 per cent with a margin of 2 per cent on either side. However, food inflation plays the major role in tracking the CPI index followed by rural and urban inflation in the system. “Food inflation for July 2024 is the lowest since June 2023, while the corresponding inflation rate for rural and urban is 5.89 per cent and 4.63 per cent, respectively,” the data showed.

Meanwhile, the NSO data also showed that India’s industrial production slowed to a five-month low of 4.2 per cent in June 2024, mainly due to poor performance of the manufacturing sector, though power and mining sectors continue to perform well. The factory output growth, measured in terms of the Index of Industrial Production or IIP, was 6.2 per cent in May, 5 per cent in April, 5.5 per cent in March, 5.6 per cent in February and 4.2 per cent in January 2024.

As per the data, the mining output growth accelerated to 10.3 per cent in June against a 7.6 per cent expansion in the year-ago month. “The manufacturing sector’s growth decelerated to 2.6 per cent in June compared to 3.5 per cent a year ago. Besides, the power generation increased by 8.6 per cent in June against a growth of 4.2 per cent in the same month of the last year,” the data showed.

As per use-base classification, the capital goods segment growth fell to 2.4 per cent in June 2024 from 2.9 per cent in the year-ago period. In June this year, consumer durables output expanded 8.6 per cent compared to a 6.8 percent contraction in June 2023. “Consumer non-durable goods production contracted 1.4 per cent during the reporting month against a growth of 0.5 per cent in May 2023,” the data showed.

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