Retail inflation: Retail inflation may reach a five-month low, due to this there is a possibility of a reduction

There is news of relief on the inflation front. Retail inflation is expected to remain at 6.65 percent for July. If that happens, it will be the lowest rate in five months. Inflation is expected to come down due to a fall in food prices and a reduction in tax on fuel.

Barclays has said in its report that there may be a decrease of 0.36 percent in July as against 7.01 percent in June. The inflation data for July will be released on August 12. Earlier in April, the rate of retail inflation had reached an 8-year high of 7.79 percent.

Duty on petrol and diesel was reduced in May

The government had reduced excise duty on petrol and diesel in May. This is expected to bring relief on many fronts with food items. Rahul Bajoria, Chief Economist, India, Barclays, said several factors are expected to reduce retail inflation. Also, by October, it can come under the RBI's fixed ambit.

Inflation will decrease further in two to three months

Barclays said RBI will also get relief due to a reduction in the inflation rate. It is expected that it will continue to decrease for the next two to three months. The possibility of a fall in prices on the front like edible oil, and cooking gas will also reduce now. However, it said that floods in some parts of the country last month may have caused some damage.

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