Retail inflation quickens to 2.1% in August, snaps 9-month falling streak

Retail inflation broke a nine-month declining streak in August 2025, quickening to 2.1% from 1.6% in July 2025, in keeping with official knowledge. The inflation in August was marginally greater than the decrease sure of the Reserve Bank of India’s consolation band of 2-6% for retail inflation. 

The fee of retail inflation had been declining each month since November 2024.

The knowledge launched by the Ministry of Statistics and Programme Implementation on Friday (September 12, 2025) confirmed that the inflation within the meals and drinks class remained flat in August 2025, at 0.05%, in comparison with 5.3% in August final yr.

“Within meals merchandise, the primary drivers of low inflation are greens and pulses which recorded -15.9% and -14.5% respectively,” in keeping with a be aware by the Bank of Baroda’s economics analysis wing. “Oils proceed to exert upward strain with 21.2% inflation on account of greater world costs in addition to low base impact.”

Inflation within the clothes and footwear class remained just about unchanged at 2.67% in August 2025 in contrast with 2.62% in July. Similarly, inflation within the housing phase stood at 3.06% in August in contrast with 3.03% in July.

The gasoline and light-weight class noticed a comparatively quicker improve in inflation, which quickened to 2.9% in August 2025 from 1.4% in July. 

According to Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, the the GST fee minimize impression is more likely to play out within the yr forward, partly offsetting the impression of an adversarial base impact in 2026-27. 

“While we see a pause by the RBI within the upcoming coverage, we do see some scope for fee cuts price 25-50 foundation factors opening up from December coverage if draw back dangers to development materialise and the Fed strikes forward with aggressive fee cuts,” she stated.