The retail inflation rate in India has climbed to 5.08% in June 2024, marking a four-month high, up from 4.80% in May. According to the Ministry of Statistics & Programme Implementation, the year-on-year inflation rate based on the All India Consumer Price Index (CPI) is provisionally 5.08% for June 2024. The inflation rate for rural areas stands at 5.66%, while for urban areas it is 4.39%. This rise in inflation can have various implications on the economy, affecting purchasing power and potentially influencing monetary policy decisions.
In June 2024, food inflation in India surged to 9.55%, up from 8.69% in May and significantly higher than the 4.55% recorded in June 2023. Rural inflation also increased, reaching 5.67% in June, compared to 5.34% in May and 4.78% in June 2023. Conversely, urban inflation experienced a slight decrease, falling to 4.39% in June from 4.21% in May and 4.96% in June 2023.
Additionally, India’s Index of Industrial Production (IIP) saw an increase of 5.9% in May, up from 5% in April, as reported by the Ministry of Statistics and Programme Implementation (MoSPI).
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, commented on the inflation figures, stating, “The CPI inflation came marginally higher than our expectations. While the food inflation risks will continue to dominate in the near term, we expect 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.”
