NEW DELHI: Retail or consumer price index (CPI) inflation fell to 3.15 per cent in July from 3.18 per cent in June, data released by government on Tuesday showed. The number is well below the Reserve Bank of India’s (RBI’s) target of 4 per cent.

Inflation based consumer price index stood at 3.05 per cent in May 2019 and 4.17 per cent in July last year.

The Reserve Bank of India (RBI) mainly factors in the retail inflation while deciding the bi-monthly monetary policy.

As per the data released by the Central Statistics Office (CSO), the inflation in the food basket was 2.36 per cent in July, marginally up from 2.25 per cent in the previous month.

The rate of price rise in vegetables softened to 2.82 per cent during the latest month as against a rise of 4.66 per cent in June, while prices of ‘pulses and products’ went up to 6.82 per cent from 5.68 per cent.

“The marginal dip in the CPI inflation in July 2019 was led by fuel and light, which recorded a disinflation in that month, even as food and core inflation inched up.

“The incoming trends in food prices need to be cautiously watched, following the recent flooding in some states, rising vegetable prices and continued lag in kharif sowing. Moreover, an unfavourable base effect is likely to contribute to a hardening of food inflation in the ongoing quarter,” Aditi Nayar, principal economist at Icra told news agency PTI.

However, a poll conducted by news agency Reuters had predicted that the inflation could rise for the sixth straight month to 3.20 per cent in July.

(With agency inputs)

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