Retail inflation may increase again after decreasing for 9 months, inflation will go above the lower limit of RBI

Retail inflation may increase again in the August 2025 figures after decreasing for nine consecutive months. However, there is nothing to worry about, as it will remain low even after the increase. According to the report of the Center for Monitoring Indian Economy (CMIE), retail inflation will increase to 2.08% in the August figures due to the jump in the prices of food items. In July, it had come down to an 8-year low of 1.55%.

According to the report, food prices may increase by 0.6% on a monthly basis in August. However, prices will remain low compared to a year ago. However, the increase on a monthly basis may increase the inflation pressure. Also, it will cross the RBI's lower limit of 2%. In the July data, retail inflation fell below 2% for the first time in six and a half years since January 2019. The government will release August retail inflation data on Friday.

Vegetable prices have been rising since May, with the sharpest jump seen in July. However, the pace of growth slowed down in August, and it is estimated to increase by 3% on a sequential basis. Onion prices rose at a moderate pace, while potatoes declined. Better arrivals of crops like cauliflower, cabbage, and brinjal also helped in curbing this surge.

Inflation in oil and fat rose to 22.4% in August, from 19.2% in July. The highest jump in prices was seen in mustard and coconut oil. Inflation in sugar and confectionery products crossed 4%, from 3.3% in July. Jaggery has become costlier by 1%.

Inflation in grains is expected to come down to 2.8%. Due to adequate stocks of rice and wheat, prices are showing sluggishness, which is in contrast to last year, when the government had to take price control measures around this time. Arhar dal prices declined for the 13th consecutive month.