Overview
- Retail inflation rose to 2.07% in August from July’s 1.61% eight-year low, with food categories the main swing factor, according to NSO data.
- Wholesale inflation returned to 0.52% year-on-year in August after two months of deflation, driven by food and manufactured goods, while fuel and power stayed in deflation.
- Vegetable deflation narrowed sharply on the WPI gauge (to -14.18% from -28.96%), and manufactured products inflation firmed to 2.55%.
- Core CPI is reported around 4.1–4.3% with a notable lift from surging gold prices, and analysts say core excluding gold is softer.
- GST rate cuts taking effect on Sept. 22 are widely expected to push headline CPI lower in October, and while the RBI is seen on hold next month, some forecasters still pencil in conditional 25–50 bps easing in H2 FY26 as long as disinflation persists and weather and global risks stay contained.