(FE)
India’s retail inflation in July dropped to 3.54%, marking a near five-year low as food prices eased, government data revealed on Monday. This decline follows a 5.08% inflation rate in June and is the lowest recorded since August 2019.
Economists had anticipated a slightly higher inflation rate of 3.65%, but the actual figure fell below the Reserve Bank of India’s 4% target, primarily due to a high-base effect from last year. In July 2022, inflation had peaked at 7.44%, driving the comparative drop this year, Reuters reported.
Food prices, which constitute nearly half of the retail inflation basket, saw a significant slowdown, rising only 5.42% year-on-year in July compared to a 9.36% increase in June. Notably, vegetable prices rose by 6.83% in July, a sharp decline from the 29.32% surge in the previous month.
While the drop in inflation offers temporary relief, experts caution that the slower pace of price rises may not be sustained.The Index of Industrial Production (IIP) released by the Ministry of Statistics and Programme Implementation (MoSPI) shows a growth rate of 4.2% for June 2024. This marks a slight increase of 0.2% compared to the 4% growth rate recorded in June 2023, according to Ministry data.
Manufacturing output rose 2.6% in June, compared to a 3.5% rise a year ago. Electricity generation was up 8.6%, compared to a 4.2% rise last year, while mining activity grew 10.3% as against a 7.6% increase last year, Reuters reported.
