The country’s retail inflation, measured by the Consumer Price Index (CPI), eased to a three-month low of 5.59 per cent in July. The fall in the CPI inflation from 6.26 per cent in June was mainly due to softening food prices, government data released on Thursday showed. The retail inflation had shot up to 6.30 per cent in May.

According to the data released by the National Statistical Office (NSO), food inflation dropped significantly to 3.96 per cent in July from 5.15 per cent in June.

This is the first time in three months that the CPI data has come below the Reserve Bank of India’s (RBI) upper margin of 6 per cent. Prior to this, the CPI came above the 6-per cent mark for two consecutive months. The government has asked the central bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 2026.

CPI data is primarily factored in by the RBI while making its bi-monthly monetary policy. Last week, the central bank’s Monetary Policy Committee (MPC) had kept the Repo Rate unchanged for the seventh time in a row at 4 per cent while maintaining an “accommodative stance”.

Separately, India’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a year-on-year growth of 13.6 per cent in June, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed on Thursday.

The IIP for the mining, manufacturing and electricity sectors for June stood at 105.5, 121.0 and 169.1 respectively. The manufacturing sector’s output surged by 13 per cent, mining output rose by 23.1 per cent and power generation jumped by 8.3 per cent in June.

The IIP had contracted by 16.6 per cent in June 2020. During April-June this year, the IIP grew by 45 per cent against contraction of 35.6 per cent in the same quarter last year.