Why in news
Inflation in India’s consumer prices cooled dramatically from 5.1% in June to an almost five-year low of 3.54% in July
It also marks the first time since September 2019 that it has dropped below the 4% median target pursued by the RBI in its monetary policy framework.
With food price rise moderating to a 13-month low of 5.4% from a six-month high of 9.4% a month earlier
Reason for the slip
This was driven by the base effect, last July, inflation was very high (7.4%) and food prices had risen a lot (11.5%).
This makes current inflation look lower by comparison
Not really a change
Overall prices increased by 1.4% from June, and food prices went up by 2.8%.
This means prices are still rising, not falling.
Excluding food and energy, core inflation has gone up to about 3.4%-3.5% from 3.1% in June.
This shows that underlying inflation pressures are increasing.
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