Vegetable and food prices are expected to push headline inflation higher.
Core inflation may remain stable even as retail price pressures increase.
Highlights:
- India’s CPI inflation is projected to rise to 4.5% in July.
- Inflation was 4.38% in June and 1.62% in July 2025.
- Rising vegetable and food prices are expected to drive the increase.
- Core inflation is likely to remain in the 3.9–4.1% range.
- July could mark the ninth consecutive month of higher CPI inflation.
- Official inflation data will be released on August 12.
India’s retail inflation is expected to rise to 4.5% in July, the highest level in nearly 19 months, mainly due to a sharp increase in food prices, according to a Financial Express poll of economists. The estimate is based on the median forecast of 11 economists surveyed by the publication.
If the forecast proves accurate, consumer price inflation will move up from 4.38% recorded in June and remain significantly above the 1.62% level seen in July 2025. Economists believe the rise will be driven primarily by higher prices of vegetables, cereals, edible oils and other essential food items.
Food inflation has shown signs of strengthening in recent months because of seasonal supply disruptions and rising prices of key kitchen staples. While headline inflation is expected to increase, economists say core inflation, which excludes food and fuel, is likely to remain relatively stable at around 3.9% to 4.1%, indicating that broader price pressures are still under control.
Analysts also noted that global commodity prices, including gold and some imported inputs, have softened, which could provide some relief to core inflation. However, any further rise in food prices or weather-related disruptions could keep overall inflation elevated in the coming months.
The Reserve Bank of India (RBI) has recently revised its inflation outlook, highlighting that food prices and weather conditions will remain key factors influencing price trends. The central bank has also warned that the impact of El Niño and changing rainfall patterns will need close monitoring.
The Ministry of Statistics and Programme Implementation (MoSPI) is scheduled to release the official Consumer Price Index (CPI) data for July on August 12. The figures will be closely watched by markets and policymakers as they assess the outlook for inflation and future monetary policy decisions.
