India’s inflation declined to a near five-year low of 3.5 percent in July compared with 5.1 percent in the previous quarter, according to data released on July 12.
The decline was aided by a favourable base as consumer inflation had touched 7.4 percent in July 2023.
The release is in line with the Moneycontrol poll forecast of 3.6 percent.
The forecasts in the poll ranged from 3.24 percent to 4 percent.
Economists contend that inflation is likely to surprise on the downside compared with the Reserve Bank of India’s 4.4 percent inflation forecast for July-September 2024.
While the central bank did not change the overall inflation outlook for FY25 from 4.5 percent, it did project a higher inflation of 4.4 percent from 3.8 percent for the second quarter of FY25.
Reserve Bank of India governor Shaktikanta Das on August 8 expressed concerns over elevated household inflation expectations, highlighting that fall in core inflation does not merit a change in monetary stance.
The Reserve Bank of India in its policy meeting concluded on August 8, kept the policy rate on hold for the ninth consecutive time.
