India's CPI Inflation Hits Four-Month High, Exceeds 5% Mark Amid Vegetable Price Rise
The Consumer Price Index-based inflation stood at 5.08% in June, as compared to 4.75% in May.
India's retail inflation surged to a four-month high in June, driven by price rise in vegetables.
The Consumer Price Index-based inflation stood at 5.08% in June, as compared to 4.75% in May, according to data from the Ministry of Statistics and Programme Implementation, released on Friday.
A panel of economists polled by Bloomberg estimated inflation at 4.8% for the month. CPI inflation saw an uptick in June after having consistently eased in 2024.
Food and beverage prices saw a 8.36% jump in June, as compared to 7.9% in May. The rise was led by vegetable prices increasing by 29.32% on a year-on-year basis, as compared to a rise of 27.3% in the previous month.
On a sequential basis, vegetable prices rose by 14% in June.
Core inflation—that excludes volatile food and fuel—rose by 3.15% in June compared to 3.12% in May.
A weak start to the southwest monsoon in June and prolonged heatwave impacted vegetable prices, in turn pushing food and beverages inflation back above 8%, said Radhika Rao, senior economist at DBS Bank.
With about 50% of kharif sowing usually taking place in the month of July, adequate rainfall across regions will be critical over the next few weeks to accelerate the pace of sowing, said Aditi Nayar, chief economist at ICRA.
While the IMD expects above-normal rainfall in July, ICRA remains watchful of the episodes of heavy rainfall and flooding across some states that could harm crops that are already sown, she said.
Still, headline CPI inflation is expected to soften to 2.5-3.0% in July, entirely on account of the favourable base effect, which will partly absorb the impact of the sequential surge in prices of vegetables, according to Nayar.
Internals
Cereal prices rose by 8.75%, as against 8.7% in May.
Inflation in meat and fish was at 5.39%, as compared to 7.3% the previous month.
Inflation in eggs was at 3.99%, as against 7.6% last month.
Inflation in milk and milk products was at 3%, as compared with 2.6%.
Price of oils and fats declined 2.68%, as opposed to a contraction of 6.7% in the previous month.
Pulses inflation rose 16.07%, as against 17.1%.
Clothing and footwear inflation was at 2.73% versus 2.7% in the previous month.
Housing inflation was at 2.69% versus 2.6%.
