Inflation rises marginally to 2.07% in August on costly kitchen items

Retail inflation inched up to 2.07 per cent in August from 1.61 per cent in the preceding month, driven by a rise in prices of kitchen items, like vegetables, meat, fish, and eggs, according to government data released on Friday.

The rise in inflation comes after a continuous fall in the consumer price index (CPI) for nine months. It was in decline since November 2024.

The inflation was 3.65 per cent in August 2024.

The annual food inflation in August 2025 was (-) 0.69 per cent, according to the data released by the National Statistics Office (NSO).

"An increase in headline inflation and food inflation during August 2025 is mainly attributed to an increase in inflation of vegetables, meat and fish, oil and fats, and eggs," NSO said.

The Reserve Bank has been mandated by the government to ensure inflation remains at 4 per cent with a margin of 2 per cent on either side.

The inflation in rural India increased to 1.69 per cent in August from 1.18 per cent in July. In urban parts of the country, it was 2.47 per cent compared to 2.1 per cent sequentially.

Among states, the highest inflation was in Kerala at 9.04 per cent and the lowest in Assam (-0.66 pr cent).

The Reserve Bank mainly factors in the retail inflation while arriving at its bi-monthly monetary policy.

Commenting on the data, Icra Chief Economist Aditi Nayar said the sequential uptick in year-on-year CPI inflation in August 2025 was largely driven by the food and beverage segment, which was flat compared to the year-old levels, after witnessing a deflation in each of the last two months.

Core inflation inched up marginally to 4.3 per cent in August 2025 from 4.2 per cent in the previous month, while remaining similar to the range seen during the last seven months, she said.

"Looking ahead, despite the healthy trends in kharif sowing, large excess rains, and flooding in some parts of the country in late August 2025 and early September 2025 could impact the kharif crop yields, and consequently output and prices, and thus, remain a key monitorable," she said.

The CPI data showed that housing inflation in August stood at 3.09 per cent against 3.17 per cent.

NSO collects price data from selected 1,181 villages and 1,114 urban markets, covering all states/UTs.