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CPI inflation below expectations

CPI-based retail inflation decelerated marginally to 3.1% in Jul’19 from 3.2% a month ago. The number was largely in line with consensus but lower than our estimate of 3.4%. Lower headline inflation in the month can be attributed to unchanged food inflation and deflation in the ‘fuel and light’ category. Food inflation was at 2.3% v/s our estimate of 2.9%, whereas ‘fuel and light’ inflation was reported at -0.4% v/s 2.2% a month ago and our estimate of ~2.0%