India s overall inflation drops to 5-year low of 3.74 in August RBI

India-s overall inflation, measured by the wholesale price index, dropped to 5-year low of 3.74% in August compared to 5.19% in July. The inflation in August is the lowest since October 2009 when it stood at 1.8%.

Food articles inflation, which has nearly 14.34% weight in overall inflation number, eased to 5.15% in August compared to 8.43% in July as vegetable prices contracted by 4.88% in the same month. Inflation in manufactured products stood at 3.45% in August compared to 3.67% in July. The primary articles inflation dropped to 3.89% in August compared to 6.78% in July while the fuel & power inflation dropped steeply to 4.54% in August from 7.40% in July.

With this steep drop in overall Inflation, RBI has now more room to cut rates during tis next monetary policy review meeting to boost industrial and economic growth.