Retail inflation surged to 5.08% in June, rising to a 4-month high on an annual basis from 4.80% in May last month, as per government data released on Friday, July 12, 2024.
"Year-on-year inflation rate based on All India Consumer Price Index (CPI) number is 5.08% (Provisional) for the month of June, 2024. Corresponding inflation rate for rural and urban is 5.66% and 4.39%, respectively," said a release from the Ministry of Statistics & Programme Implementation.
The inflation rate has stayed within the Reserve Bank of India's (RBI) tolerance range of 2-6%.
Food inflation rose to 9.55% in June, up from 8.69% in May and 4.55% in June 2023. Rural inflation climbed to 5.67% in June from 5.34% in May and 4.78% in June 2023.
In contrast, urban inflation slightly decreased to 4.39% in June from 4.21% in May and 4.96% in June 2023.
India's Index of Industrial Production (IIP) increased by 5.9% in May compared to 5% in April, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday.
“The CPI inflation came marginally higher than our expectations. While the food inflation risks will continue to dominate in near term, we expect the better sowing patterns and spatial distribution of rains to eventually ease the price pressures beyond these volatile months. Having said that, the Central Bank will be in no hurry to ease monetary policy given the headroom from robust growth in the backdrop of near term inflation risks," said Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.
