India’s retail inflation rate experienced a significant decline in July, falling to 3.54%. This marked the first time in nearly five years that inflation dipped below the Reserve Bank of India’s (RBI) target of 4%. The cooling of food prices was the primary driver behind this decrease.
According to government data released on Monday, the Consumer Price Index (CPI) based retail inflation dropped to 3.54% in July. This represents a notable decrease from the 5.08% recorded in June 2024 and 7.44% in July 2023. The inflation rate for the food basket, a key indicator of overall inflation, stood at 5.42% in July, down from 9.36% in June, as per data from the National Statistical Office (NSO).
The last time India witnessed inflation below the 4% threshold was in September 2019. The government has entrusted the RBI with the responsibility of maintaining CPI inflation at 4%, allowing a permissible margin of 2% on either side.
