India’s retail inflation eases in July; here’s what analysts have to say

ANI: India’s retail inflation fell to 6.71 per cent in July, the lowest level in five months, helped by an easing in food and oil prices, as per the National Statistical Office (NSO) data released this Friday.

With this, retail inflation has been over the Reserve Bank of India’s upper tolerance band of 6 per cent for the seventh consecutive month in a row.

Retail inflation was at 7.01 per cent in June.

Following are some of the views from analysts and brokerages on the latest inflation data.

Nikhil Gupta, Chief Economist at MOFSL Group

Overall, today’s inflation was a non-event and unlike to move the bonds market or Central Bank’s policies. We expect inflation to ease towards 6 per cent/5.5 per cent by 4QFY23/March 2023. Accordingly, RBI could hike the repo rate by another 50-60 basis points by December 2022.

Vivek Rathi, Director-Research at Knight Frank India

India’s headline inflation softened to 6.7 per cent in July 2022 primarily due to softening of food prices. The increase in fuel inflation despite government measures to curb domestic petrol and diesel prices taken a few months ago is a concerning factor. Currently, the global crude and commodity prices have corrected, and this should further soften inflation in India in the coming months. However, rupee depreciation which increases the import costs and the fall in crop yields due to uneven monsoon this year pose near term risk to inflation in India.


The July CPI inflation has moderated more than our expectation to a five-month low of 6.71% led by lower food inflation. The slowdown in consumer inflation for the third consecutive month suggests that the inflationary pressures, though elevated, are on a downward trend. Encouragingly, households’ inflation expectations also improved in July reflecting the effectiveness of RBI and the government’s efforts to tame inflation.

SBI Research

Though the overall CPI inflation eased from April to June, among the states, there are many bigger states, whose inflation continues to be above 7 per cent in July 2022. Among the 23 States, there are 15 States whose inflation is above 6 per cent (21 States in April) and 8 States with an inflation rate of below 6 per cent. Going forward, we now expect the inflation trajectory for India to be benign. CPI numbers for March 23 could be even lower than 5 per cent.

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