New Delhi, July 12 (Mayank Nigam) Primarily on account of high food prices, India’s retail inflation measured by consumer price index (CPI) inched up to 5.08% in June 2024 from 4.80% in the previous month, as per data released by Ministry of Statistics & Programme Implementation on Friday. The retail inflation in June this year, however, stayed within the Reserve Bank of India (RBI)’s tolerance range of 2-6%. Retail inflation is one of the most important factors which are considered by the RBI while determining the key lending rate during its monetary policy review. Food inflation surged to 9.36% in June this year from 8.69% in the previous month. The MoSPI data showed rural inflation was higher than urban inflation in June this year.
Among food items, vegetable inflation was significantly high at 29.32% in the month of June this year. Pulses and products inflation also stayed high at 16.07% during this period. “The uptick in the headline CPI inflation to a four-month high of 5.1% in June 2024, in line with ICRA’s expectations, was largely led by a rebound in the food and beverages inflation to above 8.0%, amid a sharp sequential increase in vegetable prices. Barring food and beverages, inflation across all the other sub-groups remained below the 4.0% mark in June 2024,” said ICRA chief economist Aditi Nayar. She further said, “ICRA estimates the headline CPI inflation to soften to 2.5-3.0% in July 2024 entirely on account of the favourable base effect (+7.4% in July 2023), which will partly absorb the impact of the sequential surge in prices of vegetables. Further, a sustained spell of heavy rainfall can further push up perishable prices, which imbues caution into the near-term outlook.”