“Domestic growth momentum is strong and GDP [gross domestic product] is expected to come above 7 per cent in Q1 [the first quarter] FY25, though geopolitical uncertainty is one of the risks to growth dynamics,” the newsletter said.

The country’s CPI inflation eased to almost a five-year low of 3.54 per cent in July this year compared to 5.08 per cent in June, smoothened in part by a base effect, it said.

This is also the first time in last five years that CPI inflation is lower than the central bank’s target of 4 per cent.

The sharp deceleration in vegetable prices from a high of 29.3 per cent in June to merely 6.8 per cent in July is the major contributor to this multi-year low retail inflation, it noted.

The core CPI increased from 3.12 per cent in Jun to 3.30 per cent in July, primarily due to increase in mobile tariff.

The gap between core CPI and overall CPI has turned lowest since April 2023.

“Meanwhile, RBI is maintaining tight liquidity to control inflation. Given the current predicaments, the rate cut has been shifted to Dec 2024/Feb 2025. The state wise evolution of CPI inflation shows most of the states witnessing a rate lesser than the national average,” it said.

The state-wise evolution of CPI inflation shows most states witnessing a rate lesser than the national average. Of the 22 states, only six states recorded an inflation higher than the national average. Thus, on an average, there was broader deflation seen across all geographies, it added.

Fibre2Fashion News Desk (DS)