CPI data: Retail inflation moves up to 4.45% in July; above RBI's target for 2nd month

The Consumer Price Index (CPI) for July 2026 showed a retail inflation rate of 4.45%, surpassing the Reserve Bank of India's target of 4% for the second consecutive month. The All India Consumer Price Index, using 2024 as the base year, recorded a provisional year-on-year inflation rate of 4.45% for July 2026, up from 4.38% in June. Rural India saw higher inflation at 4.84%, compared to 3.96% in urban areas.

Food inflation, measured by the All India Consumer Food Price Index, was 5.52% year-on-year in July 2026, with rural food inflation at 5.79% and urban at 5.05%. Housing inflation stood at 2.22% in July 2026, with rural areas at 2.80% and urban areas at 2.01%.

The Reserve Bank of India maintained policy rates unchanged but lowered the full-year inflation forecast and raised GDP growth projections. The Monetary Policy Committee noted that headline CPI inflation edged up above the target, largely due to fuel and food prices. Core inflation, excluding precious metals, remained benign. RBI Governor Sanjay Malhotra projected that headline inflation would rise further in the near term, peaking in Q3 2026-27, before moderating.