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India Today
2 days ago
- Business
- India Today
Inflation hits 8-year low. Does your wallet agree?
India's retail inflation plunged to an eight-year low in July, clocking in at just 1.55%, a figure that, at first glance, feels like a windfall for households. But does it really translate into relief for your monthly budget?On paper, the headline number looks like an economic milestone. The sharp decline was driven by steep price corrections in high-weight food items such as vegetables (-20.7%), pulses (-13.8%), and spices (-3.1%), he points out. Tomatoes, onions, and potatoes alone saw prices collapse by over 34%. This also pushed the Consumer Food Price Index (CFPI) into deflationary territory at -1.76%, down from -1.01% in are forecasting headline CPI inflation below 3.0% until December 2025, with our FY26 inflation target lowered to 3.0% from 3.5%, assuming normal monsoons,' said Sankar Chakraborti, MD & CEO of Acuit Ratings & Research. For policymakers, these numbers scream success. In a world where many economies are still struggling with inflation north of 3–4%, India's July inflation print makes it one of the most stable markets globally. For families, though, that figure is more fiction than fact as the cost of living refuses to play YOUR WALLET STILL FEELS THE PINCHMuch of this dramatic drop owes to a technical quirk: the base effect. Prices are compared year-on-year, and July 2024 was a period of high food inflation. That inflated base makes this year's reading look exceptionally Radhika Rao, Executive Director and Senior Economist at DBS Bank, said: 'July headline inflation rose by the slowest pace in over eight years to 1.6% yoy vs 2.1% in June. The print was a touch firmer than expectations but well below the RBI's target range. Much of the softness was driven by food and base effects. On a sequential basis, however, vegetables saw a seasonal lift, while pulses and cereals decelerated.'This means the fall in inflation is not because most goods and services are getting significantly cheaper, but because food prices are much lower compared to last INFLATION REMAINS STICKYWhile overall retail inflation has cooled, core inflation—that excludes food and fuel—remains stubborn, even after a slight dip. It may be noted that core inflation better reflects what households actually experience. In July, core inflation came in at 4.1%, a slight dip from 4.4%.'Core inflation eased to 4.1% YoY in July (vs. 4.4% YoY in the previous month). Excluding energy and gold, refined core inflation also eased to 3.1% YoY,' says Tanvee Gupta Jain, Chief India Economist at UBS moderation came mainly from transport and communication costs due to last year's telecom tariff hike (a base effect), and a slight easing in education. But as Jain notes, personal care and healthcare costs inched up Chakraborti highlighted the same concern: 'Education (4.0%), health (4.6%), and transport & communication (2.1%) remain sticky, indicating ongoing core inflation pressures.'Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, also expressed the same concern. 'The soft July inflation print is largely led by food inflation, with vegetables, pulses and cereals helping the trend. While the food inflation remains in check, the core inflation (even after netting out the impact of higher gold prices) remains elevated, suggesting inherent underlying price pressures across non-food categories,' Bhardwaj other words, the categories households cannot avoid—health, education, housing—are still expensive and getting more THE DISCONNECT?Here's where the disconnect deepens. The CPI basket is built on 2011–12 consumption patterns, when food dominated household urban families spend much more on healthcare, education, housing, technology, and digital services—all categories with much higher inflation rates than food. But because these items carry less weight in the index, the headline CPI underplays the when vegetable prices crash, inflation looks tamed, even if your monthly expenses on tuition, hospital bills, or EMIs keep this is low real wage growth. Nominal salary hikes average about 9.5%, but after adjusting for inflation and taxes, real growth is closer to 4–7%.A big chunk of this is swallowed by EMIs and household debt, which has doubled over the past savings have dropped to a record low of just 18% of GDP. Combine that with lifestyle inflation driven by pricier private schooling, advanced healthcare, and constant tech upgrades, and the relief from disinflation quickly the gap between official numbers and household reality remains wide. Even with inflation at an eight-year low, millions of housholds across India are still feeling the pinch. What India faces seems to be an inflation paradox: a historic low on paper, stubborn pressure on the ground.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
Asia News Network
2 days ago
- Business
- Asia News Network
India's retail inflation slips to eight-year low of 1.55% in July
NEW DELHI – India's retail inflation slipped to an eight-year low of 1.55 per cent in July, mainly due to subdued prices of food items, including vegetables and cereals. The consumer price index (CPI) based inflation was 2.1 per cent in June and 3.6 per cent in July 2024. According to the data released by the Ministry of Statistics & Programme Implementation (MoSPI) on Tuesday, there is a decline of 55 basis points in the headline inflation of July 2025 in comparison to June 2025. It is the lowest year-on-year inflation rate since June 2017. The year-on-year inflation rate based on the All India Consumer Food Price Index (CFPI) for July 2025 over the same month in 2024 is -1.76 per cent (Provisional). Corresponding inflation rates for rural and urban are -1.74 per cent and -1.90 per cent, respectively, the data said. The food inflation in July 2025 is also the lowest after January 2019. A decline of 75 basis points is observed in food inflation in July 2025 in comparison to the previous month. 'The significant decline in headline inflation and food inflation during July 2025 is mainly attributed to favourable base effect and the decline in inflation of pulses and products, transport and communication, vegetables, cereal and products, education, egg and sugar, and confectionery,' the National Statistics Office (NSO) said. Notably, at the policy meeting, the Reserve Bank of India has cut its full-year inflation forecast to 3.1 per cent from 3.7 per cent earlier. The RBI expects inflation to average 2.1 per cent in the second quarter, 3.1 per cent in the third, and end the fiscal at 4.4 per cent.
Time of India
2 days ago
- Business
- Time of India
Punjab logs 3.53% inflation, more than double national average
1 2 Chandigarh: Even as India's retail inflation eased to a seven-year low of 1.55%, Punjab recorded a much higher price rise at 3.53%, placing it among the costlier states in the country where consumers had to dig deeper into their pockets. Punjab's divergence from the national trend indicates persistent high prices in key consumption categories, including food and beverages, clothing and footwear, housing, and fuel and light, particularly in rural areas, even as the rest of the country experiences broad relief in household budgets. Inflation, which refers to the rate at which prices for goods and services rise over time, directly affects consumers' purchasing power. Without proportionate growth in incomes, rising costs make it increasingly difficult for households to sustain their standard of living. According to the latest Consumer Price Index (CPI) data for July released by the National Statistics Office, the national slowdown in price rise was driven largely by a sharp fall in food inflation, with the all-India Consumer Food Price Index (CFPI) dropping to -1.76%, its lowest since Jan 2019. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Use an AI Writing Tool That Actually Understands Your Voice Grammarly Install Now Undo by Taboola by Taboola Falling prices of pulses, vegetables, cereals, eggs, and sugar contributed to the decline. Punjab's combined rural and urban CPI inflation of 3.53% was more than double the national average. In comparison, Haryana stood at 1.61% and Himachal Pradesh at 2.21%, both significantly lower than Punjab's rate. In rural Punjab, inflation was 4.12%, above Haryana's 1.72% and Himachal's 2.27%. In urban areas, Punjab's inflation rate was 2.77%, also higher than Haryana's 1.51% and Himachal's 2.18%. Nationally, Kerala topped the chart with 8.89% inflation, followed by Jammu and Kashmir at 3.77%, Punjab at 3.53%, Karnataka at 2.73%, and Maharashtra at 2.28% among states with over 50 lakh population. The all-India rural inflation rate stood at 1.18% and urban at 2.05%, both sharply down from June's figures. Food inflation was negative in both segments (1.74% in rural and -1.90% in urban India), indicating a broad-based cooling in prices. The state has seen fluctuating but persistently high inflation in recent months. According to earlier data, the inflation was 4.28% in Jan, 3.55% in Feb, 3.65% in March, 4.09% in April, and a sharp jump to 5.21% in May, followed by a drop to 4.67% in June. Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and silver prices in your area.
India.com
3 days ago
- Business
- India.com
India's Consumer Inflation Drops In July, Eases For 9th Straight Month To 1.55%
New Delhi: India's Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of July dropped to 1.55. There is decline of 55 basis points in headline inflation of July, 2025 in comparison to June, 2025, the lowest year-on-year inflation rate after June 2017, government data showed on Tuesday. Food inflation, a key component of the CPI also went downward. "Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the month of July, 2025 over July, 2024 is -1.76% (Provisional). Corresponding inflation rates for rural and urban are -1.74% and -1.90%, respectively. All India inflation rates for CPI (General) and CFPI over the last 13 months are shown below. A decline of 75 basis points is observed in food inflation in July, 2025 in comparison to June, 2025. The food inflation in July, 2025 is the lowest after January, 2019," Ministry of Statistics & Programme Implementation data showed. The significant decline in headline inflation and food inflation during the month of July, 2025 is mainly attributed to favorable base effect and to decline in inflation of Pulses and Products, Transport and communication, Vegetables, Cereal and products, Education, Egg and Sugar and confectionery, said Ministry of Statistics & Programme Implementation. It may be recalled that the Reserve Bank of India had last inn its Monetary Policy last week had pegged India's CPI inflation at 3.1 percent for FY2025-26, as the steady progress of the monsoon and robust kharif sowing are expected to keep food prices in check. RBI Governor Sanjay Malhotra said, 'The inflation outlook for 2025-26 has become more benign than expected in June. Large favourable base effects combined with steady progress of the southwest monsoon, healthy kharif sowing, adequate reservoir levels and comfortable buffer stocks of foodgrains have contributed to this moderation.' CPI inflation, however, is likely to edge up above 4 per cent by Q4 2025-26 and beyond, as unfavourable base effects, and demand side factors from policy actions come into play. Barring any major negative shock to input prices, core inflation is likely to remain moderately above 4 per cent during the year, he explained. With Agency Inputs
News18
3 days ago
- Business
- News18
Retail inflation eases to 1.55% in July 2025, lowest since June 2017
New Delhi, [India] August 12 (ANI): India's retail inflation, as measured by the Consumer Price Index (CPI), eased sharply to 1.55 per cent in July 2025 on a year-on-year basis, marking the lowest level since June 2017, according to data released by the Ministry of Statistics and Programme Implementation on decline of 55 basis points from June 2025's headline inflation reflects easing prices across key categories and a favorable base inflation, based on the Consumer Food Price Index (CFPI), dropped further into negative territory at -1.76 per cent in July, compared to -1.01 per cent in June. This marks the lowest level of food inflation since January 2019. The fall is attributed to a broad-based decline in prices of pulses and products, vegetables, cereals, eggs, sugar and confectionery, as well as transport and communication rural areas, headline inflation fell to 1.18 per cent in July from 1.72 per cent in June, while rural food inflation declined to -1.74 per cent from -0.87 per cent over the same period. Urban inflation also eased, falling to 2.05 per cent in July from 2.56 per cent in June, with urban food inflation slipping further to -1.90 per cent from -1.17 per the housing inflation rate stood at 3.17 per cent in July, nearly unchanged from 3.18% in June. Education inflation eased to 4.00 per cent in July from 4.37 per cent a month earlier. Health inflation, however, edged up slightly to 4.57 per cent from 4.38 per cent in June.A notable decline was recorded in the transport and communication category, where inflation fell sharply to 2.12 per cent in July from 3.90 per cent in June. Fuel and light inflation inched up to 2.67 per cent, compared to 2.55 per cent in the previous sharp moderation in both headline and food inflation is expected to provide some relief to policymakers and consumers, particularly in a period of global economic data reflects continued softening of price pressures in both rural and urban segments, suggesting a favorable inflation outlook in the near term. (ANI)
