ECONOMY
Retail inflation hits a record low of 1.55% in July, spurred by low food prices
- IBJ Bureau
- Aug 13, 2025
Headline retail inflation fell sharply to 1.55 per cent in July 2025, down by 55 basis points from June’s 2.10 per cent. This is the lowest level of retail inflation – as measured by the Consumer Price Index (CPI) – since June 2017, according to data released by the National Statistics Office (NSO).
The drop has been driven largely by a steep fall in food prices. The Consumer Food Price Index (CFPI) registered a deflation of 1.76 per cent year-on-year in July compared with a 0.01 per cent contraction in June. Rural food inflation stood at -1.74 per cent, while it was slightly deeper at -1.90 per cent for urban food inflation.
This is the lowest food inflation reading since January 2019. The NSO has noted that food inflation has declined by 75 basis points from that of the previous month, reflecting a favourable base effect and easing prices of key items.
The rural CPI inflation for July was 1.18 per cent, down from 1.72 per cent in June, while urban inflation slowed to 2.05 per cent from 2.56 per cent over the same period.
Economists expect the sharp disinflation to strengthen the case for monetary easing by the Reserve Bank of India (RBI), especially if price pressures remain subdued in coming months. However, they caution that weather conditions and global commodity prices will remain the key factors to watch.
The July reading is well below the RBI’s medium-term inflation target of 4 per cent, offering significant comfort to policymakers, as they balance growth and price stability.
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