Retail inflation slips to 8-yr low of 1.6% in July
Data released by the National Statistics Office (NSO) on Tuesday showed retail inflation, as measured by the consumer price index (
CPI
), slowed to 1.6%, below the 2.1% in June and lower than the 3.6% in July last year. This is the first time in eight years that the rate fell below the 2% mark.
Food inflation fell by 1.8% in July compared with a decline of 1% in June. The sharp decline in overall retail inflation and food inflation during July is largely attributed to a favourable base effect and a decline in the inflation of pulses and products, transport and communication, vegetables, cereal and products, education, egg, and sugar and confectionery.
Rural inflation was lower at 1.2% while urban inflation was at 2.1%, the data showed.
"Food inflation declined by 75 basis points in July, compared to June. The food inflation in July 2025 is the lowest at -1.8%, after Jan 2019, when it was at -2.2%. The core inflation also decelerated sharply and for the first time in six months stood below 4% (at 3.9%). Excluding gold prices, the core inflation decelerated below 3% to 2.96% in July, almost 100 basis points lower than headline core CPI," said Soumya Kanti Ghosh, group chief economic adviser at SBI.
Vegetable inflation fell by 20.7% during July, while pulses and products declined by 13.8%. Food and beverages inflation fell by 0.8% during the month. Experts said RBI will be in a wait-and-watch mode on interest rates and may move depending on the extent of the impact of the US tariffs on growth.
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