Did India’s CPI inflation rise to 2.07% in August while food prices decline?
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Synopsis
India's CPI inflation increased to 2.07% in August, despite a drop in food prices, easing the financial strain on consumers. As the Reserve Bank of India maintains its target, concerns about future inflation rise as demand factors may influence prices in the coming years.
Key Takeaways
- India's CPI inflation rose to 2.07% in August.
- Food inflation remains negative at -0.69%.
- The RBI's target inflation rate is 4%.
- Inflationary pressures are rising in meat, fish, and edible oils.
- The RBI projects 3.1% CPI inflation for 2025-26.
New Delhi, Sep 12 (NationPress) India's inflation rate, as measured by the Consumer Price Index (CPI), has risen to 2.07% in August. Despite this increase, food prices continued to drop, providing some relief for consumers, according to data released by the Ministry of Statistics on Friday.
The inflation rate for August marked a slight rise from July's 1.61%, which was the lowest year-on-year retail inflation rate since June 2017.
Importantly, this inflation rate remains comfortably within the RBI's target of 4%, enabling the central bank to maintain a soft monetary policy aimed at stimulating economic growth.
Food inflation was recorded at -0.69% in August, remaining negative for the third month in a row. This decline is largely due to a 15.92% drop in vegetable prices, alongside a 14.53% decrease in pulse prices. Spice prices also saw a decline of 3.24% during the month.
The rise in overall inflation compared to July can mainly be attributed to higher prices for meat, fish, edible oils, fats, eggs, and personal care items.
In contrast, fuel inflation stood at 2.43% in August, down from 2.67% in July, while housing inflation was recorded at 3.09%, compared to 3.17% in the previous month.
Health inflation also saw a decrease, recording 4.40% in August compared to 4.57% in July.
The Reserve Bank of India (RBI) has projected India's CPI inflation to be 3.1% for 2025-26, anticipating that favorable monsoon conditions and strong kharif sowing will help stabilize food prices.
Recently, RBI Governor Sanjay Malhotra commented, "The inflation outlook for 2025-26 is better than previously expected. Favorable base effects, combined with steady monsoon progress and healthy kharif sowing, are contributing to this moderation."
However, CPI inflation is anticipated to rise above 4% in the fourth quarter of 2025-26 due to adverse base effects and demand-side factors stemming from policy actions. Unless significant negative shocks to input prices occur, core inflation is expected to remain moderately above 4% throughout the year.
Point of View
It is crucial to understand that while the inflation rate has increased, the negative food inflation is providing necessary relief to consumers. The Reserve Bank of India's ability to maintain its inflation target is vital for economic stability. Our focus should remain on these trends and their implications for the common citizen.
NationPress
12/09/2025
Frequently Asked Questions
What is India's CPI inflation rate for August?
India's CPI inflation rate for August has risen to 2.07%.
How does food inflation compare to previous months?
Food inflation in August is recorded at -0.69%, remaining negative for the third consecutive month.
What is the RBI's inflation target?
The Reserve Bank of India's target inflation rate is 4%.
What factors contributed to the rise in inflation?
The increase in inflation is attributed to rising prices for meat, fish, edible oils, and personal care items.
What is the forecast for CPI inflation for 2025-26?
The RBI has projected India's CPI inflation at 3.1% for 2025-26.
