Stay updated on CPI inflation in August 2024. Explore the latest Consumer Price Index data release, its impact on the economy.
Retail Inflation in August 2024: India’s CPI inflation in August 2024 stood at 3.65 per cent as compared with 6.83 per cent a year ago, according to official data released on Thursday, September 12. This is the second lowest in the last five years. Meanwhile, India’s industrial output growth, based on IIP, records a growth of 4.8 per cent in July 2024.
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India’s retail inflation in the previous month of July 2024 had stood at 3.6 per cent.
“Year-on-year inflation rate (3.65%) based on All India Consumer Price Index (CPI) for the month of August, 2024, is second lowest in the last five years. Corresponding inflation rates for rural and urban are 4.16% and 3.14%, respectively,” the Ministry of Statistics & Programme Implementation said in a statement.
According to the latest data released by the National Statistical Office (NSO), inflation in the food basket eased to 5.89 per cent in August 2024, compared with 9.94 per cent a year ago. In July 2024, the food inflation had stood at 5.42 per cent.
Decline in inflation is observed in the subgroups of ‘spices’, ‘meat and fish’ and ‘pulses and products’ etc, the ministry said said.
“Food inflation for August 2024 is the second lowest since June, 2023. Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) number is 5.66% (Provisional) for the month of August, 2024. Corresponding inflation rate for rural and urban is 6.02% and 4.99%, respectively,” the MoSPI stated.
At item level, tomato has exhibited the lowest year on year inflation (-47.91%) as well as lowest MoM change in index (-28.8%).
“The CPI inflation unexpectedly inched up to 3.7% in August 2024 from 3.6% in July 2024, in contrast with our forecast of an easing, largely led by the food and beverages segment. With the base effect normalising, we anticipate a sharp pickup in the CPI inflation to ~4.8% in September 2024, and range between 4.4% and 4.7% in H2 FY2025,” Aditi Nayar, chief economist and head of research and outreach at ICRA, said.
She added that notwithstanding the anticipated hardening in September 2024, the average CPI inflation will undershoot the MPC’s Q2 FY2025 estimate of 4.6%. With the Q1 FY2025 GDP growth print (+6.7%), having undershot the MPC’s forecast for the quarter (+7.1%), a change in stance in the October 2024 policy meeting can’t be entirely ruled out.
“It is encouraging that the inflation has printed below 4 per cent during the successive months of July and August driven by base effect and deflation in fuel and light but the food inflation is closer to the upper band of 6 percent. RBI will not initiate the rate cut cycle unless the inflation is sustainably aligned to the target of 4 percent and there is any material growth slowdown in the economy including consumption. It must be noted that the consumption growth was robust in the first quarter of FY25 and the inflation projection for FY25 is 4.5 percent,” said Sandeep Vempati, an economist with the BJP.
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IIP Growth in July 2024
India’s industrial production growth slowed down to 4.8 per cent in July this year mainly due to poor show by mining and manufacturing sectors, according to official data released on Thursday.
The factory output, measured in terms of the Index of Industrial Production (IIP) witnessed a growth of 6.2 per cent in July 2023.
India’s Index of Industrial Production (IIP) increased by 4.8 per cent in July 2024, an official statement said.
The data released by the National Statistical Office (NSO) showed that the manufacturing sector’s output grew 4.6 per cent in July 2024 against 5.3 per cent in the year-ago month. Mining production rose by 3.7 per cent and power output increased 7.9 per cent in July 2024.
In the April-July period, the IIP grew 5.2 per cent against 5.1 per cent in the year-ago period.
