India’s retail inflation eased to 1.55% in July, marking its lowest level since June 2017.
The sharp decline was largely driven by falling food prices, which dropped sharply.
Headline inflation has now stayed under the RBI’s 2%–6% target for over six months.
Analysts view the print positively—yet many expect inflation to rise again by early
2026.
RBI maintained a neutral policy stance, citing manageable inflation and balanced economic
growth.
The disinflation is seen as a potential signal for future monetary easing, though cautiously.
Consumer purchasing power gains from the low inflation trend are benefiting households.
Core inflation remains sturdier, indicating underlying price pressures persist.
Economists expect inflation to gradually rebound above 4% by March 2026.
Overall, the inflation outlook remains favorable, but policymakers remain
watchful of volatility.