India's Retail Inflation Falls For First Time In 6 Months; Eases Marginally To 3.15% In July

Breaking its six-month rising streak, India's retail inflation slipped marginally in the month of July despite rise in food prices, a government data released on Tuesday evening stated.

Retail Inflation Eases Marginally To 3.15 Pc In July
(File Photo/ Getty)
By: ABP News Bureau
Updated: 13 Aug 2019 06:31 PM
New Delhi: Breaking its six-month rising streak, India's retail inflation slipped marginally in the month of July despite rise in food prices, a government data released on Tuesday evening stated. The slip, however, remained comfortably within Reserve Bank of India's (RBI) target level of 4 per cent. The retail inflation based on Consumer Price Index (CPI) was 3.18 per cent in June and 4.17 per cent in July 2018.

As per the data released by the Central Statistics Office (CSO), the inflation in the food basket was 2.36 per cent in July, marginally up from 2.25 per cent in the previous month. Retail inflation is well below the RBI's comfort level. The government has asked the central bank to keep inflation in the range of 4 per cent.


The Reserve Bank of India mainly factors in retail inflation in its bi-monthly monetary policy. Reports also suggest that the cereals inflation remained unchanged at 1.31 per cent in July, fuel and light inflation stood at (-) 0.36 per cent as against 2.32 per cent in the previous month. The vegetables inflation was at 2.82 per cent compared to 4.66 per cent in the last month.

The government has asked the central bank to keep inflation in the range of 4 per cent. RBI largely factors in retail inflation in its bi-monthly monetary policy. The CPI-based retail inflation data captures changes in shop-end prices and is the main metric that RBI tracks to decide on interest rates.

Earlier this month, RBI reduced the interest rate by an unconventional 35 basis points -- the fourth successive reduction -- to a nine-year low, in an attempt to boost the economy growing at its slowest pace in nearly five years. The central bank reduced its growth projection for the Indian economy to 6.9 per cent for the current financial year, from 7 per cent forecast in June, due to a slowdown in demand and investments.

This was the fourth repo rate cut in as many policies since February 2019. RBI has projected retail inflation to be at 3.1 percent during July-September 2019 and at 3.5-3.7 percent during October-March 2019-20. CPI inflation for April-June 2020 is projected at 3.6 percent.

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