Retail Inflation Reaches 5.08% in June, Highest in 4 Months

New Delhi: Retail inflation climbed to a four-month high of 5.08% in June 2024, up from 4.80% in May, according to the latest government data. The Ministry of Statistics & Programme Implementation reported that rural inflation reached 5.66%, while urban areas experienced a 4.39% rate.

Food prices continue to be a primary driver, with food inflation jumping to 9.55% in June from 8.69% in May. This marks a significant increase from the 4.55% recorded in June 2023. Rural areas saw inflation rise to 5.67% in June, up from 5.34% in May and 4.78% a year ago. Interestingly, urban inflation slightly decreased to 4.39% in June from 4.21% in May.

Despite the uptick, inflation remains within the Reserve Bank of India’s (RBI) tolerance band of 2-6%.

In a positive economic indicator, the Index of Industrial Production (IIP) showed robust growth, increasing by 5.9% in May compared to 5% in April.

Experts suggest that while food inflation risks may persist in the short term, improved sowing patterns and rain distribution could alleviate price pressures in the coming months. However, the central bank is expected to maintain a cautious approach to monetary policy given the current economic landscape.