NEW DELHI: Retail inflation slowed to an eight-year low in July due to moderating food prices. Also, the easing trend continued for the ninth month in a row, providing comfort on the prices front against the backdrop of trade tensions.Data released by the National Statistics Office (NSO) on Tuesday showed retail inflation, as measured by the consumer price index (CPI), slowed to 1.6%, below the 2.1% in June and lower than the 3.6% in July last year. This is the first time in eight years that the rate fell below the 2% mark.Food inflation fell by 1.8% in July compared with a decline of 1% in June. The sharp decline in overall retail inflation and food inflation during July is largely attributed to a favourable base effect and a decline in the inflation of pulses and products, transport and communication, vegetables, cereal and products, education, egg, and sugar and confectionery.

Rural inflation was lower at 1.2% while urban inflation was at 2.1%, the data showed.“Food inflation declined by 75 basis points in July, compared to June. The food inflation in July 2025 is the lowest at -1.8%, after Jan 2019, when it was at -2.2%. The core inflation also decelerated sharply and for the first time in six months stood below 4% (at 3.9%). Excluding gold prices, the core inflation decelerated below 3% to 2.96% in July, almost 100 basis points lower than headline core CPI,” said Soumya Kanti Ghosh, group chief economic adviser at SBI.Vegetable inflation fell by 20.7% during July, while pulses and products declined by 13.8%. Food and beverages inflation fell by 0.8% during the month. Experts said RBI will be in a wait-and-watch mode on interest rates and may move depending on the extent of the impact of the US tariffs on growth.