Retail Inflation Dips to 8-Year Low Amidst Subdued Food Prices

Retail inflation in India reached an unprecedented low of 1.55% in July, marking the slowest growth since June 2017, as per government data released on Tuesday. This decline is significant, falling beneath the Reserve Bank's comfort zone for the first time in over four years, driven primarily by reduced food prices.

The Reserve Bank aims to maintain retail inflation at 4%, allowing a margin of 2% either way. The decreasing inflation rate, attributed to favorable base effects and diminishing prices in categories like pulses, communication, and education, reflects a broad economic shift.

Despite the overall drop, inflation varied significantly across Indian states with Kerala seeing rates as high as 8.89%, whereas Assam experienced negative inflation at -0.61%. Chief Economist Aditi Nayar predicts a rise in inflation later in the fiscal year due to underlying economic factors.

(With inputs from agencies.)