June CPI Inflation Recorded 4-Month High At 5.08%

Rural areas recorded a higher inflation rate of 5.66 per cent, whereas urban areas saw a slightly lower rate of 4.39 per cent

In June 2024, the year-on-year inflation rate based on the All India Consumer Price Index (CPI) was reported at 5.08 per cent (Provisional) backed by high food prices. Rural areas recorded a higher inflation rate of 5.66 per cent, whereas urban areas saw a slightly lower rate of 4.39 per cent, the Ministry of Statistics and Programme Implementation said on Friday. June's retail inflation of 5.08 per cent marks the highest rate in the past four months.

Concurrently, retail inflation for May 2024 stood at 4.75 per cent. The previous peak in inflation occurred in February, reaching 5.09 per cent. In June 2023, CPI inflation was 4.87 per cent. According to data from the National Statistical Office (NSO), inflation in the food basket rose to 9.36 per cent in June 2024, up from 8.69 per cent in May 2024 and 4.55 per cent in June 2023.

In June, food inflation surged to 9.55 per cent from 8.69 per cent in May and 4.55 per cent in June 2023. Specifically, vegetable prices rose sharply by 29.32 per cent in June 2023, while inflation for pulses and related products accelerated to 16.1 per cent.

Previously, a Bloomberg survey of economists projected CPI-based inflation for June at 4.8 per cent. “A delayed start to the southwest monsoon and prolonged heatwave is likely to have pushed June inflation to 5 per cent year-on-year, higher than the trend anticipated earlier in the month," said Radhika Rao, senior economist at DBS Bank. 

Since September of the previous year, inflation has remained within the Reserve Bank of India's tolerance range of 4 (+/-2) per cent. However, it is expected to experience an uptick after consistently declining earlier this year.

Meanwhile, in May 2024, India's Index of Industrial Production (IIP) growth increased to 5.9 per cent from 5 per cent in April. According to a government press release, the IIP recorded a growth of 5.7 per cent in May 2023. The highest previous IIP growth was registered at 11.9 per cent in October 2023, followed by declines to 2.5 per cent in November, 4.2 per cent in December, and 4.1 per cent in January 2024.