Informist Poll
CPI inflation seen rising to 2.1% in Aug from Jul's 8-year low
This story was originally published at 16:32 IST on 9 September 2025
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By Shubham Rana
NEW DELHI – CPI inflation in India likely rose to 2.1% in August from an eight-year low in July because of fading away of the statistical effect of a favourable base and a rise in food and gold prices, according to an Informist poll of 12 economists.
Retail inflation fell to 1.55% in July, the lowest since June 2017, mainly because of a statistical effect of a high base. It was 3.65% in August 2024. August would mark the first rise in CPI inflation in 10 months. It would be the seventh consecutive month when CPI inflation is below the Reserve Bank of India's medium-term target of 4.0%.
The estimates for August CPI inflation range from 1.8% to 2.5%. The statistics ministry will release CPI data for August at 1600 IST on Friday. An inflation rate of 2.1% in August would translate to a 0.6% rise in the overall index from July. Typically, the overall index rises sequentially during the summer months, mainly because of a rise in vegetable prices. On an average, the overall index has risen 0.5% on month in August in the last 12 years.
The sequential rise is likely to be driven by higher food prices, particularly tomato, which rose 26% month on month in August, as per data from the Department of Consumer Affairs. Retail prices of other food items such as wheat, some pulses, and edible oils also rose from July and are expected to have contributed to higher food inflation.
According to economists at Union Bank of India, food and beverages inflation is expected to rise to 0.91% in August from (-)0.84% in July. "With at least one more month of monsoon still left, monsoon trends with special focus on spatial distribution will be keenly watched out for as a few states like Rajasthan, Punjab, and Haryana are now grappling with flood like situation which may not bode well for food inflation," Union Bank of India said in a report.
Apart from food prices, core inflation is also seen rising in August because of higher gold prices. Core inflation--which excludes food and fuel items, whose prices can be volatile--is seen rising to 4.2% in August from 4.1% in the previous month.
Even if inflation rises to 2.1% in August as is projected, it could be lower than the Reserve Bank of India's projection of 2.1% for the September quarter, economists said. Inflation would have to rise to around 2.6% in September, to be in line with the central bank's projection.
Lower-than-projected inflation in the September quarter would provide comfort to the RBI's Monetary Policy Committee, which left the repo rate unchanged at 5.50% in August, after lowering it by 100 basis points between February and June. "Whether low CPI inflation will translate into another rate cut in October depends upon how the RBI is reading the growth picture," ANZ Bank India said in a report.
"A strong Q1 FY26 print was inflated by an exceptionally low deflator and public spending frontloading. 50% US import tariffs have kicked in and will likely weigh on growth in the coming quarters," ANZ said, adding that it sees another 25-bps rate cut in October, "albeit with reduced conviction than before."
The following is a summary of the poll on CPI inflation in August:
| ORGANISATION | CPI INFLATION ESTIMATE |
| Moody's Analytics | 1.8% |
| Nirmal Bang Institutional Equities | 2.0% |
| ANZ Bank India | 2.0% |
| Capital Economics | 2.0% |
| Bank of Baroda | 2.0% |
| STCI Primary Dealer | 2.1% |
| Sunidhi Securities | 2.12% |
| Societe Generale | 2.2% |
| CareEdge Ratings | 2.3% |
| HDFC Bank | 2.4% |
| IDFC FIRST Bank | 2.5% |
| Union Bank of India | 2.54% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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