retail inflation In India It stood at 7.01 per cent during June, which is almost the same as compared to 7.04 per cent in May. This is the sixth consecutive month that inflation is above the RBI’s tolerance limit of 6 per cent. Inflation in rural areas stood at 7.09 per cent during June 2022, while it was 6.92 per cent in urban areas.
However, this is the second consecutive month that inflation has seen a marginal decline as compared to the previous month. Inflation rate was 7.79 percent in April, which has come down to 7.04 percent in May and now it has come down to 7.01 percent in June.
Core inflation, excluding the food and fuel segment, stood at 6 per cent in June. Food inflation stood at 7.75 per cent in June, up from 7.97 per cent in the previous month.
According to data released by the National Statistical Office (NSO) on Tuesday, the inflation print in vegetables declined to 17.37 per cent from 18.26 per cent in May, while it declined to (-) 1.02 for ‘pulses and products’. . Percentage as against (-)0.42 per cent.
However, the rate of price increase in ‘cereals and products’ stood at 5.66 per cent, as against 5.33 per cent in the previous month. Inflation in the ‘fuel and light’ category rose to 10.39 per cent as against 9.54 per cent, while for fruits it increased to 3.10 per cent from 2.33 per cent.
Upasana Bhardwaj, Chief Economist, Kotak Mahindra Bank said, “CPI inflation remained broadly stable around 7 per cent, bringing the 1QFY23 average to 7.3 per cent, marginally lower than RBI’s estimates of 7.5 per cent. However, Inflation is expected to remain elevated with only a gradual decline during the rest of the year.”
Bhardwaj said that while there has been some respite from the softening of global commodity prices, gains will be limited due to the depreciating rupee. “We expect the MPC to continue with policy rate hikes, especially as global monetary tightening continues. We expect the repo rate to rise to 5.75-6 per cent by the end of FY23 with an additional rate hike of 85-110 bps in the coming few meetings.
Retail inflation eased slightly to 7.04 per cent in May as reduction in excise duty contributed significantly to bringing down food prices last month. In May, consumer price index-based (CPI) inflation remained above the Reserve Bank of India’s (RBI) upper tolerance limit for the fifth consecutive month.
Since inflation remained outside the central bank’s target range, the Reserve Bank India (RBI) raised the key repo rate by 50 basis points (bps) in early June, nearly a month after the central bank’s monetary policy committee hiked it by 40 basis points in an off-cycle policy review in May. The second was growth.