India’s retail inflation for the month of June increased to 5.08%, breaking a five-month streak of moderation. Food inflation marked another high at 9.36%.
Although the numbers are within The Reserve Bank of India’s (RBI) tolerance band for inflation for FY25, set within a range of 2% to 6% with a medium-term target of 4%, the rural inflation rate is higher at 5.66% compared to the urban rate of 4.39%.
The Consumer Food Price Index (CFPI), which measures changes in food prices, shows a significant increase with a combined inflation rate of 9.36%. The rural CFPI is at 9.15%, while the urban CFPI is slightly higher at 9.55%.
Notably, inflation for sub-groups like ‘Eggs’, ‘Spices’, ‘Meat & Fish’, and ‘Pulses & Products’ has decreased compared to May 2024.
Retail price rise had touched a 12-month low of 4.75% in May, even though food inflation stayed stuck at 8.7% for a second straight month. For the rural population, the inflation rate for cereals was 6.59%, while for the urban population it remained at 9.67%.
Unexpected and prolonged heatwaves have driven food prices up across many parts of India, potentially creating challenges for policymakers.
Movement of Retail Inflation in 2024
