CPI inflation dips to eight-month low of 3.8% in July 2015

Vegetables inflation slips into sub-zero level contributing to the dip in CPI inflation

The all-India general CPI inflation dipped to 3.8% in July 2015 (new base 2012=100), which is lowest reading in last eight months against 3.3% in November 2014, from 5.4% in June 2015. A dip in inflation for food and beverages mainly contributed to the steep fall in overall CPI inflation, while inflation also declined for all other major sub-groups in July 2015.

The corresponding provisional inflation rate for rural area was 4.4% and urban area 2.9% in July 2015 as against 6.1% and 4.6% in June 2015.

The core CPI inflation declined to 4% in July 2015 from 4.6% in June 2015.

The CPI inflation decline in July 2015 was mainly driven by fall in inflation for food and beverages to 2.9% from 5.7% in May 2015. Within the food items, the inflation slipped sharply in to sub-zero level for vegetables to (-) 7.9%, while also eased for milk and products to 6.1% in July 2015.

The inflation of the pan, tobacco & intoxicants group was flat at 9.8%, while inflation for clothing and footwear also declined to 5.9% in July 2015. Further, the housing inflation eased to 4.4%, while the CPI inflation for fuel and light also fell to 5.4% in July 2015.

The inflation for miscellaneous items dipped to 3.4% in July 2015 from 4.2% in June 2015, driven by fall in inflation for transport & communication to (-) 0.4%, education 6.6%, and personal care 2.8% in July 2015.

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