India Inflation Rate Falls Below RBI Tolerance Band

2025-08-12 10:42 By Andre Joaquim 1 min. read

The annual consumer price inflation rate in India fell to 1.55% in July of 2025 from 2.1% in the previous month, firmly below the market consensus of a 1.76%, to mark the ninth consecutive decrease in the inflation rate and only 1 basis point away from the series-low in June of 2017.

It was the first time that price growth fell below the Reserve Bank of India's wide tolerance band of 2%-6% since 2019, reinforcing the view that the central bank may deliver another interest rate cut this year.

The slowdown was owed to a second drop in prices of food (-1.76% vs 1.06% in June) amid a plunge in costs of vegetables (-20.69% vs -19%).

In the meantime, inflation also slowed for transport and communication (2.12% vs 3.9%) and remained relatively resilient for housing (3.17% vs 3.24%).

From the previous month, consumer prices were 0.9% higher.



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