India's July CPI Hits 4.45% as Food and Fuel Pressures Keep Beating 4% Target
Updated
Updated · Real Economy Blog · Aug 17
India's July CPI Hits 4.45% as Food and Fuel Pressures Keep Beating 4% Target
3 articles · Updated · Real Economy Blog · Aug 17
Summary
India’s consumer inflation accelerated to 4.45% in July, topping the RBI’s 4% medium-term target for a second straight month.
Food and beverages drove the increase after a weak, uneven monsoon delayed sowing in several states, while fuel-linked costs from the Middle East conflict still lifted annual transport and restaurant prices.
Transport cooled sharply from June on a monthly basis, suggesting the earlier fuel shock is fading even though year-on-year price gains remain elevated.
The supply-led nature of the rise is likely to keep the RBI on hold at its Oct. 7 meeting, with inflation seen staying near current levels for 2-3 months before easing later in the fiscal year.
Analysts expect CPI to average about 5% in 2026-27, broadly matching the RBI’s revised forecast and leaving room for one 25-basis-point cut in December or February.