Archive · 12 Aug 2026
India's retail inflation hits 19-month high of 4.45%
In India, the prices of many things we buy went up a little more last month.
In July, the rate at which prices rose was 4.45%, the highest in 19 months.
Food got more expensive, especially meat, some vegetables, spices and pulses.
Eating out at restaurants also costs more than before.
The Reserve Bank of India, the country's central bank, wants inflation to stay near 4%.
For the second month in a row, inflation went above that target.
Lower prices of gold and silver helped to keep the overall rise smaller.
Experts think prices could rise even faster in September.
The central bank has kept its main interest rate at 5.25% for now.
If prices keep going up, the central bank might raise that rate in December or February.
India's retail inflation rose to a 19-month high of 4.45% in July, up from 4.38% in June.
Higher food prices drove the rise, with food inflation at 5.52%, while falling gold and silver prices limited the impact.
Core inflation, excluding food and fuel, remained steady at 3.9%, showing limited generalisation of price pressures.
Economists expect headline inflation to rise above 5% in September and average around 5% in 2026-27.
The RBI kept the repo rate unchanged at 5.25%; most economists expect a rate hike in December or February.
- Who
- India's statistics ministry released the data; the Reserve Bank of India's Monetary Policy Committee is weighing the inflation outlook.
- What
- Retail (CPI) inflation rose to a 19-month high of 4.45% in July, driven mainly by higher food prices.
- When
- July 2026; data released on Wednesday.
- Where
- India.
- Why
- Sharper rises in food prices, along with elevated fuel and transport costs from May's fuel price hikes, pushed the headline rate above the RBI's 4% target for a second consecutive month.
Tightening camp
Wait-and-see camp
Timing of a possible rate hike
Tightening camp
Most economists expect the RBI to raise interest rates in December or February as headline inflation is seen rising above 5%.
Wait-and-see camp
CareEdge Ratings' base case expects no further rate hike by the RBI in FY27, though one later in the year cannot be ruled out.
How quickly to respond to inflation
Tightening camp
Oxford Economics and HDFC Bank warn that second-round effects and rising medium-term inflation expectations will make it harder for policymakers to look through the supply-driven shock.
Wait-and-see camp
The RBI has signalled it wants clearer evidence of generalisation and persistence before tightening, leaving the repo rate unchanged at 5.25%.
- July CPI inflation
- 4.45% (19-month high)
- June CPI inflation
- 4.38%
- Food inflation
- 5.52% (June: 5.32%)
- Core inflation
- 3.9%
- Repo rate
- 5.25% (unchanged)
- RBI FY27 inflation forecast
- 5% (cut by 10 basis points)
- Expected September inflation
- Above 5%