New Delhi, Aug. 13 -- India's benchmark inflation fell to 1.55% in July , the second lowest monthly inflation in the current series on the back of a contraction in food prices. The latest inflation numbers vindicate the Reserve Bank of India's downward revision of its annual inflation forecast from 3.7% to 3.1% in the Monetary Policy Committee (MPC) meeting held earlier this month but also underline its concerns about the benign inflation environment being driven by food prices. Indeed, while the food part of the CPI basket contracted by 1.8% in July, its non-food component saw an annual growth of 3.9%. With the inflation numbers turning out to be low as RBI expected them to, the policy focus will now shift to June quarter growth numbers which will be released at the end of this month. To be sure, growth headwinds are likely to have strengthened more recently in the wake of the US putting a tariff of 50% (including a 25% penalty unfairly singling out India for Russian oil imports) earlier this month. Experts believe that the RBI is likely to monitor incoming growth data and the outcome of ongoing trade negotiations to decide its policy course. Retail inflation, as measured by the Consumer Price Index (CPI) grew at just 1.55% in July according to data released by the National Statistical Office (NSO) on Tuesday, the second lowest by a very small distance in the current inflation series which has monthly inflation numbers from January 2012. The lowest monthly inflation number in the current series is 1.46% for June 2017. To be sure, the latest inflation numbers are low despite a base effect being in play unlike the June 2017 numbers. Inflation prints for July 2024 and June 2016 were 5.8% and 3.6% respectively. The biggest reason for the ongoing decline in inflation - July is the ninth consecutive monthly fall in inflation numbers - is a fall in food inflation which has been in contraction zone for the past two months. Food inflation was 10.9% in October 2024 and it has been falling every month since then, contracting by 1% and 1.8% in the months of June and July. Within the food group, vegetables and pulses lead the fall in prices, with the respective sub-categories falling by 20.7% and 13.8% on a year-on-year basis in July. While oil and fats and fruits sub-categories did show a double-digit inflation, most other categories adhered to the trend of benign inflation. The trend is especially noteworthy for cereals and products which had an inflation of just 3%, something which is expected to continue amidst a satisfactory rainfall in the monsoon season. What is noteworthy about the July inflation numbers is the fact that they have also seen a moderation in core inflation - non-food non-fuel part of the CPI basket - which did not see a monthly increase for the first time in seven months . The core inflation number, according to Centre for Monitoring Indian Economy (CMIE) data, came in at 4.16% in July , 24 basis points lower than its June reading. One basis point is one hundredth of a percentage point....