According to government data released on Friday, a sharp increase in food prices in June caused India’s retail inflation rate to rise for the first time in five months. June saw a 5.08 percent annual retail inflation rate, up from 4.75% in May. Inflation was predicted by Reuters polling economists to be 4.80%. Food prices, which make up almost half of retail inflation, increased in June by 9.36% over the previous year after increasing by 8.69% in May. Since November 2023, the annual growth rate of food prices has exceeded 8%.
June saw a 29.32% increase in vegetable prices compared to July’s 27.33% increase as a result of severe heatwaves and flooding in northern India’s states that affected agricultural output. Vegetables have been observed to be affected by the heatwave… High inflation will persist for these products, according to Bank of Baroda economist Madan Sabnavis.
Food prices and rising rural inflation “is a cause of concern both for consumption and investment growth,” according to India Ratings economist Devendra Pant. According to official data, in June, rural inflation was 5.66 percent, while urban inflation was 4.39 percent. Cereal inflation decreased to 8.75 percent in June from 8.69 percent in May, while pulse inflation decreased to 16.07 percent from 17.14 percent.
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