Retail Inflation Accelerates in July as Food Prices Remain Elevated

India’s retail inflation accelerated to 4.45 per cent on an annual basis in July, rising from 4.38 per cent in June and remaining above the Reserve Bank of India’s 4 per cent target for the second consecutive month. The July reading is the highest recorded under the new Consumer Price Index (CPI) series with 2024 as the base year.

Data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that inflation increased to 4.84 per cent in rural areas, while urban inflation rose to 3.96 per cent.

Food price pressures remained significant during the month. Inflation based on the All India Consumer Food Price Index (CFPI) stood at 5.52 per cent in July, compared with 5.32 per cent in June.

The increase in overall inflation was mainly associated with higher prices across categories including personal care, social protection, restaurants and accommodation services, food and beverages, and intoxicants.

Among individual items, silver, gold, diamond and platinum jewellery, ginger, garlic and onion recorded relatively high inflation at the all-India combined level. In contrast, potato, motor cars and jeeps, lady’s finger, peas and tomato were among the items recording the lowest inflation.

The latest figures indicate that food prices continue to exert pressure on household inflation even as overall retail inflation remains relatively close to the central bank’s target.