2 weeks ago
Retail Inflation Climbs to 4.45% in July on Food Prices
Prices of things we buy went up a little more in July.
The government measures this and calls it inflation, and it reached 4.45%.
That is a bit higher than June's 4.38%.
Food became especially more expensive.
Onions cost about 22% more than last year, and ginger cost about 84% more.
The Reserve Bank of India wants prices to go up by about 4% each year.
It thinks prices might climb a bit more before coming back down.
Experts say the weather, like El Nino, and world events could make food cost even more soon.
They also say GST tax cuts that made things cheaper are starting to wear off.
India's retail inflation rose to 4.45% in July, up from 4.38% in June, the highest since the new 2024-base series began.
Food inflation climbed to 5.52%, with onion prices up 22.54% and ginger up 83.62% year-on-year.
The Reserve Bank of India expects headline inflation to peak in Q3 2026-27 and projects CPI inflation at 5% for 2026-27.
Rural inflation stood at 4.84% and urban at 3.96%, with Telangana highest at 6.32% and Mizoram lowest at 1.84%.
Economists warn that adverse base effects, higher edible oil prices, fading GST rate cut benefits, and El Nino and geopolitical risks could push inflation higher.
- Who
- The National Statistics Office, Reserve Bank of India Governor Sanjay Malhotra, and economists from Crisil and India Ratings and Research.
- What
- Retail (CPI) inflation rose to 4.45% in July, driven by soaring food prices, especially onions and ginger.
- Where
- India, with rural inflation at 4.84% and urban inflation at 3.96%.
- When
- July, based on government data released by the National Statistics Office.
- Why
- A significant rise in food prices and fuel costs kept inflation above the Reserve Bank's 4% target for a second consecutive month.
Key facts
- CPI retail inflation (July)
- 4.45% (provisional)
- CPI retail inflation (June)
- 4.38%
- Food inflation (July)
- 5.52%
- Onion inflation (July)
- 22.54% (vs 4.73% in June)
- Ginger inflation (July)
- 83.62%
- RBI inflation target mandate
- 4% with a margin of 2% on either side
- RBI CPI projection for 2026-27
- 5%
- Highest and lowest state inflation
- Telangana 6.32%; Mizoram 1.84%
Quotes
Dipti Deshpande
Senior Director and Principal Economist at Crisil
“However, this comfort may prove short-lived. Adverse base effects for food inflation, higher edible oil prices, the fading impact of GST rate cuts and a gradual pass‑through of input costs, particularly transportation costs, are expected to push inflation higher in the coming months.”
rediff.com
“Persistent upside risks are posed by geopolitical tensions and the El Nino weather pattern, though some improvement in the latter could be visible in the August print. Crude price volatility is expected to continue with oil likely to hover around USD 80-85/bbl in the coming weeks.”
rediff.com
Reserve Bank Governor Sanjay Malhotra
Governor of the Reserve Bank of India
“The higher inflation is mostly on account of fuel and food, with few signs of generalisation of price pressures so far.”
rediff.com
Sources
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