- India's retail inflation rose to 4.45% in July, highest in 18 months
- Food inflation increased to 5.52%, driving the rise in headline inflation
- Core CPI inflation eased to 3.9%, showing contained underlying price pressures
India's retail inflation accelerated further in July, with Consumer Price Index (CPI)-based inflation rising to 4.45%, its highest level in 18 months, from 4.38% in June. The reading was also above the market estimate of 4.40%, marking the second consecutive month in which retail inflation remained above the Reserve Bank of India's 4% target.
The July inflation data points to a renewed increase in price pressures, led primarily by food inflation. The rise in headline inflation comes despite a moderation in core CPI inflation during the month.
Food Inflation Rises To 5.52%
Food inflation increased to 5.52% in July from 5.32% in the previous month, emerging as a key driver of the rise in headline inflation. Inflation in the broader food and beverages category also accelerated to 5.24% from 5.05% month-on-month.
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The increase in food inflation will remain a key concern for policymakers, given the significant weight of food items in India's CPI basket and their impact on household purchasing power.
Core CPI Inflation Eases
Core CPI inflation, which excludes food and fuel, moderated to 3.9% in July from 4.1% in June. The moderation suggests that underlying price pressures remained relatively contained even as the headline inflation rate moved higher. However, the rise in several non-food categories added to the overall increase in retail inflation.
Inflation in clothing and footwear rose to 3.38% in July from 3.23% in June. Housing and utilities inflation also increased to 2.16% from 1.99%.
Health inflation moderated to 1.34% in July from 1.42% in the previous month.
Meanwhile, transport inflation increased to 4.43% from 4.31% in June, adding to broader price pressures.
The latest inflation print will be closely watched for its implications for monetary policy, particularly after retail inflation remained above the RBI's 4% target for a second consecutive month.
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