As food prices decline, retail inflation slows to 5-month low of 4.31%

The retail inflation in January fell to a five-month low of 4.31 per cent, mainly due to a decline in the prices of vegetables, eggs, cereals and pulses.

Measured by the Consumer Price Index, the retail inflation stood at 5.22 per cent in December and 5.1 per cent in January 2024, according to data released by the Ministry of Statistics and Programme Implementation.

On a decline since October, the previous low inflation was in August 2024 at 3.65 per cent. It stood at 5.48 per cent in November, 6.21 per cent in October and 5.49 per cent in September.

The rural inflation in January was slightly higher at 4.64 per cent while it was 3.87 per cent in urban areas.

There has been a sharp decline of 237 basis point in food inflation in January at 6.02 per cent compared to 8.39 per cent in December 2024. It stood at 9.04 per cent in November, 10.87 per cent in October, 9.24 per cent in September and 5.66 per cent in August. Rural areas experienced a food inflation rate of 6.31 per cent while urban parts saw a slightly lower rate of 5.53 per cent. The top five items showing the highest year-on-year inflation in January were coconut oil (54.20 per cent), potato (49.61 per cent), coconut (38.71 per cent), garlic (30.65 per cent) and peas (30.17 per cent).

The items recording the lowest year-on-year inflation in January included jeera (-32.25 per cent), ginger (-30.92 per cent), dry chilly (-11.27 per cent), brinjal (-9.94 per cent) and LPG (excluding conveyance) (-9.29 per cent).

The top five states which had higher inflation than the national average in January were Kerala (6.76 per cent), Odisha (6.05 per cent), Chhattisgarh (5.85 per cent), Haryana (5.1 per cent) and Bihar (5.06 per cent), according to the data.

The Reserve Bank of India had implemented a 25 basis points rate reduction last week, its first in five years, to boost growth amidst favourable inflation levels.

Industrial output down to 3.2%

India’s industrial output, measured by the Index of Industrial Production (IIP), slowed to 3.2 per cent in December 2024 from 5.2 per cent in November, driven largely by a slowdown in the manufacturing sector.