India's retail inflation rate rose above 5 percent, doubling food inflation in June
The year-on-year inflation rate based on the All India Consumer Price Index (CPI) number is 5.08 percent (provisional) for the month of June, 2024.
New Delhi: India's retail inflation crossed the five percent mark in June, in a surprising departure from the moderation seen in the past few months. Inflation in June, 24, was above a 12-month low of 4.75 percent. Additionally, the year-on-year inflation rate based on the All India Consumer Price Index (CPI) number is 5.08 percent (provisional) for the month of June, 2024. The respective inflation rate for rural and urban is 5.66 percent and 4.39 percent. percent, respectively.
Food prices are still a sore point for policymakers in India. Retail inflation of cereals and products, meat and fish, eggs, milk and products, oils and fats, fruits, vegetables, especially pulses and products, sugar, spices, ready-made snacks and sweets increased month-on-month, government data showed. month
Price data were collected through personal visits by field staff from selected 1114 urban markets and 1181 villages covering all states/UTs. The next release date for July 2024 CPI is 12 August 2024 (Monday).
Compared with annual retail inflation in May
Annual retail inflation was at a 12-month low of 4.75 percent in May, marginally down from 4.83 percent in April. Retail inflation, or the consumer price index, was 5.7 percent in December last year and has moderated since then. Retail inflation in India is within the RBI's comfort level of 2-6 percent but above the ideal of 4 percent.
Inflation is a concern for many countries, including advanced economies, but India has largely managed its inflation trajectory successfully. With the RBI keeping the repo rate unchanged for the eighth consecutive time, the month-on-month marginal inflation rate eased except for June.
Barring the recent hiatus, the RBI has hiked the repo rate by a cumulative 250 basis points from May 2022 in its fight against inflation. Raising interest rates is a monetary policy tool that generally helps suppress demand in the economy, which in turn helps lower inflation. Repo rate is the interest rate at which RBI lends to other banks. Pressures on food prices are disrupting India's ongoing deflationary process and posing challenges to inflation's eventual path to the 4 percent target.
(with input from agencies)
