However, inflation is still above the Reserve Bank of India’s comfort zone threshold of 6%.
In July, inflation had skyrocketed following sharp prices for food, especially tomatoes, across the country.
According to data released for August, food inflation declined from 11.51 percent in July to 9.94 percent in August.
It is striking that last year the consumer price index (CPIThe inflation-based inflation rate was 7.44 percent in July and 7 percent in August.
The Reserve Bank of India (RBI) has projected CPI inflation for 2023-2024 at 5.4 percent.
Chief economist at Kotak Mahindra (Mumbai) Upasna Bhardwaj told Reuters that August figures were in line with expectations.
“They are largely led by the moderation in vegetable prices and the decline in core inflation. These figures should give the MPC (monetary policy committee) some breathing space.”
“However, we remain vigilant on grains, pulses and rising oil prices. Overall, today’s data reinforces our view of a prolonged policy rate pause, with a clear warning on any risks to headline inflation,” she said.
(With input from agencies)