India’s consumer price inflation at a 5-month high of 5% in June
13 Jul 2018
Consumer price inflation in the country rose to five-month high of 5 per cent in June from a four-month high of 4.87 per cent in May, on the back of higher fuel prices and a depreciating rupee, justifying the Reserve Bank’s monetary stance.
India’s consumer price inflation stood at 4.87 per cent in May while it was 1.46 per cent in June last year, provisional figures released on Thursday showed.
However, the food price inflation, which contributes about half of the weight in the CPI index, rose marginally to 3.77 per cent in June from 3.74 per cent in May on the back of higher fuel prices, muted in part by forecast of normal rains this year.
Consumer price inflation for the rural areas stood at 5 per cent in June 2018 against 4.88 per cent in May and 1.46 per cent in June 2017.
Consumer price inflation for the urban areas stood at 4.88 per cent in June 2018 against 4.72 per cent in May and 1.41 per cent in June last year.
Food price inflation for rural areas stood at 3.74 per cent in June 2018 against 3.77 per cent in May and (-) 1.62 per cent in June last year.
Food price inflation for urban areas stood at 1.56 per cent in June 2018 against 1.66 per cent in May and (-) 3.16 per cent in June last year.
The spike in inflation rate was driven mainly by faster increases in fuel prices and a fall in the rupee’s value, which pushes up prices of imported goods.
With this retail inflation has stayed above RBI’s medium-term target of 4 per cent, which also opens the possibility of a hardening of interest rates after RBI’s next monetary policy meeting due in August.