New Delhi, August 12(HS): India’s retail inflation dropped sharply to 1.55% in July, reaching its lowest level in eight years and falling below the 2% mark for the first time since January 2019. In June, the figure stood at 2.1%.

Data from the Ministry of Statistics and Programme Implementation show that the Consumer Price Index (CPI)-based inflation in July was at its lowest in 97 months, close to the 1.54% recorded in June 2017.

The decline was mainly driven by falling food prices. Food inflation remained in negative territory for the second month in a row at -1.8%, compared to -1.1% in June. Rural inflation eased from 1.72% to 1.18%, while urban inflation fell from 2.56% to 2.05%.

Retail inflation has remained below the Reserve Bank of India’s 4% target since February. Reflecting this trend, the RBI recently cut its full‑year inflation forecast to 3.1% from the earlier estimate of 3.7%. It expects average inflation of 2.1% in the second quarter, 3.1% in the third, and 4.4% in the last quarter of the fiscal year.

The fall in inflation is expected to ease pressure on household budgets and give the RBI more flexibility to support economic growth while keeping prices stable.

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Hindusthan Samachar / Jun Sarkar