Retail inflation eases to 6.71% in July

New Delhi: Retail inflation softened to 6.71 per cent in July due to moderation in food prices but remained above the Reserve Bank's comfort level of 6 per cent for the seventh consecutive month.

With retail inflation continuing to remain high despite a fall in prices of vegetables and edible oils, among other commodities in July, the Reserve Bank of India (RBI) might go for another rate hike in September.

The Consumer Price Index (CPI) based retail inflation was at 7.01 per cent in June and 5.59 per cent in July 2021. It was above 7 per cent from April to June this fiscal. According to the data released by the National Statistical Office (NSO) on Friday, food inflation in July moderated to 6.75 per cent as against 7.75 per cent in June.

The retail inflation is above RBI's upper tolerance level of 6 per cent and has remained at that level for the past seven months. Meanwhile, the moderation in retail inflation in July was mainly due to easing of vegetable and edible oil prices. In the case of 'fuel and light', the prices remained high. Fears of a global recession and fresh geopolitical uncertainties have led to a correction in commodity prices from the peaks seen in mid-June 2022, rating agency ICRA's Chief Economist Aditi Nayar said.