Lower food inflation and the base effect contributed to the decline in consumer inflation. Food inflation fell to 3.96% in July from 5.15% in June.
On a month-on-month basis, the consumer price index rose 0.74% while the overall consumer price index was up 0.74%, highlighting the base effect. Clothing and footwear inflation stood at 6.46% compared with 6.2% in June. Housing inflation was 3.86% in July compared with 3.75% in June.
“Apart from base effects, food inflation moderated on lower perishables and pulses, helped also by administrative changes, i.e, import duty cuts,” said Radhika Rao, economist, DBS Group Research.