Retail inflation eased significantly to 5.59 per cent in July 2021 from 6.26 per cent in June as food prices dropped. The fall in Consumer Price Index (CPI) inflation was in sharp contrast to May 2021, when it had risen sharply to 6.30 per cent due to supply chain disruption owing to the second wave of the Coronavirus pandemic.
The retail inflation, was down mainly due to falling food prices as food inflation for July 2021 fell to 3.96 per cent from 5.15 per cent in June 2021.
Incidentally, compared to May 2021 levels, retail inflation has come down sequentially to reach its lowest levels in three months.
Also by going down below the 6 per cent levels, retail inflation has also reached below the Reserve Bank of India's (RBI) upper margin as the central bank had earlier stated that it should be at 4 per cent with a margin of 2 per cent on either sides for a five year period ending March 2026.