Economic Indicators

India’s Retail Inflation Dips to Three-Month Low of 5.02%



 

India’s retail inflation has dropped to a three-month low of 5.02% in September, influenced heavily by declining food prices, according to recently released government data. This downturn brings inflation back within the Reserve Bank of India’s desired sub-6% threshold, after exceeding it for two consecutive months with Consumer Price Index (CPI)-based inflation readings of 6.83% and 7.44% for August and July respectively.

The last time inflation fell so low was in June when it registered at 4.87%. The recent decline in inflation is significant as it realigns with the central bank’s target range after a two-month streak above the threshold. The decrease in inflation is largely attributed to subsiding food prices, which have a substantial impact on the overall CPI.

The Reserve Bank of India has been closely monitoring inflation trends, particularly in light of the recent breaches of their target range. The return to the sub-6% level will likely be seen as a positive development, providing some relief in terms of monetary policy considerations.

The official data released on Thursday confirmed the dip in inflation, marking a notable shift from the previous two months when it had exceeded the central bank’s target range. This recent downturn in inflation underscores the influence of food prices on India’s broader economic indicators and their role in shaping monetary policy decisions.

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