Retail Inflation Falls To Lowest Level In Nearly Five Years; Declines Below RBI 4% Target

Retail Inflation:  Government data released on Monday showed that India’s retail inflation fell to its lowest level in nearly five years in July, as base effects pushed food prices down from previous highs. The annual retail inflation stood at 3.54 percent in July, compared to 5.08 percent in June.

This is the lowest figure recorded since August 2019. Economists surveyed by Reuters had forecast inflation at 3.65 percent, based on a higher print of 7.44 percent at a 15-month high in July last year.

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Retail inflation fell below the Reserve Bank of India’s target of 4 percent mainly due to the high-base effect, which suggests that the slowdown in price appreciation was temporary. Inflation was last recorded below 4 percent in September.

Food prices, which account for about half of retail sales, rose by 5.42 percent from a year ago in July, compared to an increase of 9.36 percent in June. Vegetable prices rose by 6.83 percent year-on-year in July.

(With Reuters Input)

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