India's annual retail inflation increased to 4.45% in July from 4.38% in June, driven by elevated food prices. The figure was slightly below the Reuters poll forecast of 4.50% and remains above the Reserve Bank of India's target band.
The rise in India's retail inflation, particularly driven by food prices, keeps it above the central bank's target, potentially influencing future monetary policy decisions by the Reserve Bank of India.
India's annual retail inflation rose to 4.45% in July, an increase from 4.38% in June, according to government data. This figure was slightly below the 4.50% projected by a Reuters poll of economists. The uptick was primarily driven by elevated food prices, with the Consumer Food Price Index (CFPI) rising to 5.52% in July from 5.32% in the previous month. Specific items like onions, garlic, and ginger saw significant price increases. The latest consumer price index (CPI) reading remains above the Reserve Bank of India’s medium-term inflation target of 4%, a level it had crossed in June after a period of subdued inflation. The RBI is tasked with maintaining headline retail inflation within a 2% to 6% tolerance band.