Retail inflation ticks up in Aug, comes back within RBI's range

India's retail inflation rose for the first time since October 2024, hit by rise in prices of tomatoes, egg, meat and fish, and weaker deflationary pull from other food items.

- Rhik Kundu

Consumer price index (CPI)-based inflation rose 2.07% y-o-y in August, provisional data from the ministry of statistics and programme implementation showed on Friday, up from a revised 1.61% in July (earlier estimated at 1.55%). Economists polled by Mint had expected a slightly higher print of 2.2%.

Food price deflation narrowed to 0.69% in August 2025 from -1.76% in July, lifting retail inflation from a 97-month low of 1.6% in July. Within food, tomato prices surged 16.9% year-on-year (y-o-y) in August, marking their first rise in eight months.

Also, high gold inflation (40.27%, at a five-year high) kept core inflation above 4% in August 2025, according to Paras Jasrai, associate director, India Ratings & Research.

To be sure, even with the uptick, inflation remains well below the 3.65% recorded in August 2024 and comfortably within the Reserve Bank of India's (RBI's) 2-6% target range, keeping the door open for interest rate cuts if economic growth falters.