According to official data released on Tuesday, India’s retail inflation moderated slightly for the second consecutive month to 7.01 percent in June when compared to a year earlier. However, consumer prices, which increased 7.04 percent in May, continued to exceed the Reserve Bank of India’s 6 percent upper limit for the sixth consecutive month.
The closely watched food price index increased by 7.75 percent, somewhat less than the 7.97 percent increase seen the month before as a result of a global spiral in commodities prices. Edible oil, whose prices reached record highs in July, eased in India, which is a net importer.
Prices for vegetables shot up by 17.37 percent in the food and beverage category, while those for meat and fish increased by 8 percent. Fruits had a 3 percent increase, which is rather moderate.
While inflation in oils and fats was at 9.36 percent compared to 13.26 percent in May, it increased to 6.67 percent in the area of packed meals, snacks, and sweets, a proxy for restaurant charges.
Clothing and footwear inflation in the non-food category increased to 9.52 percent. While housing inflation in June was 3.93 percent as opposed to 3.71 percent in May, transportation costs rose by 6.90 percent.
With Russia’s invasion of Ukraine driving up prices of everything, from gasoline to food, people are being squeezed by the highest levels of inflation in decades. An earlier poll by Reuters predicted that India’s inflation will remain above the central bank’s tolerance range of 2–7 percent for the entire year, increasing the likelihood of interest rate increases. Retail inflation in June was anticipated by a Bloomberg survey of 38 economists to reach 7.1 percent.
In urban India, where inflation was 8.04 percent, food prices were higher, but they were still even higher.
