India's Retail Inflation Expected to Hit Record Low in July 2025
India's retail inflation is predicted to reach an all-time low in July 2025, with average inflation for the financial year anticipated to be much lower than the Reserve Bank of India's forecast. This decline follows a recent rate cut by the RBI and is driven by falling food prices and a focus on economic growth.
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India is on the verge of experiencing its lowest retail inflation rate on record in July 2025, according to a report from the State Bank of India (SBI). The report indicates that the average inflation rate for the 2025-26 fiscal year is projected to be significantly below the Reserve Bank of India's (RBI) estimates.
The SBI projects a Consumer Price Index (CPI) inflation rate between 3.0-3.2 percent for the fiscal year, a substantial decrease from the RBI's estimate of 3.7 percent and the average FY25 level of 4.6 percent. This drastic reduction in inflation follows a 50 basis points rate cut implemented by the RBI in June.
The report emphasizes that with inflation expectations remaining subdued, the RBI is prioritizing capital formation to foster sustainable economic growth. Data-driven, the Monetary Policy Committee will continue to balance growth and inflation in its future policy decisions. Despite global uncertainties, another rate cut may be imminent to further drive economic momentum.
June 2025 saw India's CPI inflation drop to its lowest in 77 months at 2.10 percent, down from 2.82 percent in May and 5.08 percent a year earlier. Food inflation significantly decreased, driven by price drops in staples like vegetables and pulses. However, rising imported inflation, particularly from increased gold and silver prices, remains a concern.
(With inputs from agencies.)
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