FINANCEOUTLOOKINDIAAUGUST, 20258RETAIL INFLATION HITS 8-YEAR LOW AT 1.6 PERCENT IN JULYBy Finance Outlook India TeamRetail inflation fell to an eight-year low in July as food prices moderated. Furthermore, the easing trend continued for the ninth month in a row, providing price stability in the face of trade tensions.The National Statistics Office (NSO) reported that retail inflation, as measured by the consumer price index (CPI), slowed to 1.6 percent, down from 2.1 percent in June and lower than 3.6 percent in July last year. For the first time in eight years, the rate fell below 2 percent.Food inflation fell by 1.8 percent in July, following a 1 percent decline in June. The sharp drop in overall retail inflation and food inflation in July is largely due to a favorable base effect and a decrease in the inflation of pulses and products, transportation and communication, vegetables, cereal and products, education, eggs, and sugar and confectionery.The data showed that rural inflation was 1.2 percent lower than urban inflation, which was 2.1 percent."Food inflation fell by 75 basis points in July compared with June. Food inflation in July 2025 is the lowest, at -1.8 percent, since January 2019, when it was -2.2 percent. Core inflation also fell sharply, dropping below 4 percent for the first time in six months (at 3.9 percent). Excluding gold prices, core inflation fell below 3 percent to 2.96 percent in July, nearly 100 basis points lower than headline core CPI," said Soumya Kanti Ghosh, group chief economic adviser at SBI.Vegetable inflation fell by 20.7 percent in July, while pulses and products fell by 13.8 percent. Food and beverage inflation fell by 0.8 percent this month. According to experts, the RBI will wait and see how the impact of US tariffs on growth affects interest rates. REPORT· India's retail inflation in July dropped to an eight-year low of 1.55%, led by falling food prices. · Monthly inflation eased further for the ninth consecutive month, reflecting continued disinflation across key consumer items.
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