August CPI Inflation Rise: India’s August retail inflation rose to 2.07 per cent, up 46 basis points from the previous month. In the month of July the retail inflation was at 1.61 per cent. Food prices in August fell 0.69% year-on-year, although this represents a sharp increase from –1.76% in July.
As per the MoSPI data, the increase in headline inflation and food inflation during the month of August came mainly because of an increase in inflation of Vegetables, Meat and fish, Oil and fats, Personal care and affects, Egg etc.
The Reserve Bank of India has been mandated by the government to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side.
Rural inflation at 1.69%
Rural inflation stood at 1.69% in August, compared with 1.18% in July. Food inflation in rural areas was at –0.70% in August, narrowing from –1.74% in the previous month.
Urban inflation rises to 2.47%
Urban inflation came in higher at 2.47%, up from 2.10% in July. Food inflation in urban areas also eased at –0.58% in August, compared with –1.90% a month earlier.
Housing inflation stands at 3.09%
Housing inflation was at 3.09% in August, while health costs rose 4.40%. Education inflation softened to 3.60%, down from 4.11% in July. Transport and communication costs climbed 1.94%, while fuel and light inflation was at 2.43%.
ICRA projects September CPI inflation at 2.0%
Aditi Nayar, Chief Economist at ICRA, said on the CPI data, “The sequential build-up in prices has been quite modest in the ongoing fiscal so far, due to a relatively benign uptick in food prices amid healthy crop output in the last two cropping seasons. Looking ahead, despite the healthy trends in kharif sowing, large excess rains and flooding in some parts of the country in late August and early September could impact kharif crop yields and, consequently, output and prices, and thus remain a key monitorable.
Speaking on the impact of the GST cut to be implemented from September 22, she added that with the GST rate cuts being implemented on September 22, 2025, the impact on CPI inflation is unlikely to be material in the ongoing month. Overall, ICRA expects headline CPI inflation to print at 2.0% in September 2025.”