3 weeks ago
India Retail Inflation Broadens, Hits 19-Month High in July
Inflation is when the prices of things we buy go up over time.
In July, prices in India went up by 4.45% compared with a year earlier, the biggest increase in 19 months.
Food prices went up even more, by 5.52%.
Cost increases spread across most food categories, including proteins, spices, oils, fats and fruits.
Some prices that usually stay calm, called core prices, stayed at 3.9% for three months in a row.
But more and more items are getting expensive, as 65% of the items in the price-tracking basket rose faster in July than in June.
That means price increases are spreading beyond just food and fuel.
The Reserve Bank of India, which manages the country's money, is watching closely.
It expects prices to rise above 5% from October onwards.
If that happens, it may raise interest rates to help keep prices from rising too fast.
India's CPI inflation rose to a 19-month high of 4.45% in July, with food inflation hitting a series-high of 5.52%.
Core inflation, excluding food and fuel, stayed steady at 3.9% for a third consecutive month.
Price pressures are broadening, with about 65% of the 358 items in the CPI basket seeing higher inflation in July than in June.
The number of CPI items with inflation above 4% rose to 101 in July, up from 65 in January.
Economists expect headline inflation to rise above 5% from October, which could prompt the RBI to raise the repo rate by around 50 basis points by the end of FY27 from the current 5.25%.
- Who
- RBI Governor Sanjay Malhotra, economists from ANZ Banking Group and ICICI Securities Primary Dealership, and India's Monetary Policy Committee (MPC).
- What
- India's retail inflation (CPI) rose to a 19-month high of 4.45% in July, with price pressures gradually broadening beyond food and fuel.
- Where
- India.
- When
- July, with inflation projected to rise above 5% from October onwards through the remainder of fiscal year FY27.
- Why
- Rising food inflation, firmer underlying momentum, high energy prices and strong GDP growth are expected to spill over into other parts of the CPI basket.
Key facts
- CPI inflation (July)
- 4.45% (19-month high)
- Food inflation
- 5.52% (series high)
- Core inflation
- 3.9% (steady for three consecutive months)
- Super core inflation
- 2.7% in July, up from 2.5% in June
- Items with inflation above 4%
- 101 in July vs 65 in January
- CPI basket items with higher inflation
- About 65% of 358 items in July vs June
- Current repo rate
- 5.25%
- Expected repo rate hike
- Around 50 basis points by end of FY27
Quotes
Dhiraj Nim
Economist at ANZ Banking Group
“Overall, the July data reinforced our view that inflationary pressures are gradually broadening beyond food and fuel. However, the process remains measured rather than disruptive.”
financialexpress.com










