Core retail inflation rose marginally to 2.07% in August 2025 from 1.61% in July, well within the Reserve Bank of India’s target range, according to official data released on Friday.
The RBI has been directed not to allow inflation to rise beyond its tolerance range of 2%-6% for more than three consecutive quarters.
Consumer Price Index (CPI) inflation in August rose 46 basis points year-on-year over the previous month, driven mainly by increased prices of vegetables, meat and fish, edible oils, eggs and personal care items.
The National Statistical Office said, “The increase in core inflation and food inflation during August 2025 is mainly due to increase in inflation of vegetables, meat and fish, oils and fats, personal care and food products, eggs.” Food inflation, however, remained in the negative territory for the third consecutive month at (-)0.69%, although it showed improvement compared to (-)1.76% in July.
According to the data, rural food inflation stood at (-)0.70%, while urban food inflation stood at (-)0.58%.
In the rural sector, core inflation rose to 1.69% in August from 1.18% in July. Urban inflation rose to 2.47% from 2.10% a month ago.
Housing inflation declined to 3.09% in August from 3.17% in July. Education inflation also declined to 3.60% from 4.11%, while health inflation eased slightly to 4.40% from 4.57% in the previous month.
Transport and communication inflation eased to 1.94% from 2.12%, and fuel and light inflation fell to 2.43% from 2.67% in July.
