July 2026 CPI inflation: Retail inflation for the month of July edged up to 4.45%. The All India Consumer Price Index (CPI), with 2024 as the base year, recorded a provisional year-on-year inflation rate of 4.45% in July 2026 compared with July 2025. Inflation remained higher in rural India at 4.84%, while urban areas registered a lower rate of 3.96%.This is above RBI’s target of 4% but within the range of 2-6%. Inflation in June stood at 4.38%.Based on the All India Consumer Food Price Index (CFPI), provisional food inflation stood at 5.52% year-on-year in July 2026. Rural food inflation was estimated at 5.79%, whereas the corresponding rate for urban India was 5.05%.Housing inflation, measured on a year-on-year basis, was provisionally estimated at 2.22% in July 2026. Rural areas recorded housing inflation of 2.80%, while the urban housing inflation rate was lower at 2.01%.Earlier this month, the Reserve Bank of India had kept the policy rates unchanged while lowering the full year inflation forecast and raising its GDP growth projections.“The MPC noted that headline CPI inflation edged up above the target, as expected. The realised inflation for Q1, however, remained marginally lower than projections reflecting limited pass-through of cost pressures. The higher inflation is mostly on account of fuel and food with little signs of generalisation of price pressures so far. Core inflation excluding precious metals continues to be benign. As projected earlier, headline inflation is expected to rise further in the near term and peak in Q3:2026-27, primarily due to food and fuel, before moderating thereafter,” RBI governor Sanjay Malhotra said in his policy statement.“Going forward, El Niño’s impact on temporal and spatial rainfall distribution continues to remain a major risk, although proactive supply management and adequate stock of foodgrains should provide comfort. Global oil prices have remained highly volatile with sharp two-way movements triggered by geopolitical developments, blurring the near-term outlook. Although generalised inflation pressures continue to remain modest so far, the risks of second-round impact of higher food, fuel and other input prices translating to broad-based inflation persist,” he said.“After considering all factors, CPI inflation for 2026-27 is projected to be 5.0 per cent with Q2 at 4.7 per cent; Q3 at 5.9 per cent; and Q4 at 5.5 per cent. Inflation for Q1:2027-28 is projected at 5.3 per cent with risks being evenly balanced. Core inflation is projected at 4.3 per cent for 2026-27. Core inflation excluding precious metals is projected to be lower, though it is likely to align with core inflation from Q4,” he added.
