Retail enlargement increased to 2.07 % in August from 1.55 % in July: Government Data

Retail in India increased to 2.07 % in August, up from the lowest level in eight years of 1.55 % in July, according to government data. This increase was driven by the faded effect of high basic effects, which has been inflation at low levels historically in recent months. In addition, the high food prices, which constitute nearly half of the Consumer Prices Index (CPI), contributed to the height. Despite the increase, August celebrated the seventh month in a row that inflation remained lower than the India Reserve Bank (RBI) 4 % of medium -term.

Food inflation, which constitutes nearly half of the Consumer Prices Index (CPI), increased to -0.69 % in August from -1.76 % in July.

The RBI Monetary Policy Committee (MPC) noted last month that inflation is likely to accelerate in the last quarter of the 26th fiscal year, especially due to volatility in vegetable prices and other foodstuffs.

While geopolitical tensions have eased, the central bank highlighted that global trade pressures, including the definitions received, continue to influence inflationary trends.

For FY26, RBI projects are now 3.1 % in inflation, a decrease from 3.7 % expectations in June. However, inflation is expected to penetrate 4 % in the first quarter of the 27th fiscal year, with the consumer price index displayed by 4.9 %.

The quarterly estimates of the Central Bank are:

Q2 FY26: 2.1%

Q3 FY26: 3.1 %

Q4 FY26: 4.4 %

RBI emphasized that the risks of inflation expectations remain “equally balanced.” Meanwhile, the basic inflation, which excludes food and fuel prices, has remained 4 % stable, indicating that basic price pressure exists.