Retail inflation increased to 4.81% in June from 4.31% in May

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• Jul 13, 2023 | Dhupali Das

India's annual retail inflation increased to 4.81% in June from 4.31% the previous month...

Digital Desk: India's annual retail inflation increased to 4.81% in June from 4.31% the previous month, according to government data released on Wednesday, snapping four months of easing owing to rising vegetable prices.

Food inflation, which accounts for about half of the overall consumer price basket, increased to 4.49% against a revised 2.96% in May.

Erratic and continuous rainfall in northern India could push up vegetable prices in the coming months. In June, vegetable prices jumped by 12% on a month-on-month basis.

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Inflation, however, remains below the Reserve Bank of India's comfort level of 6%.

The government has directed the central bank to keep retail inflation at 4%, with a 2% margin on either side. The central bank bases its bimonthly monetary policy decisions primarily on the CPI. The next policy review is set for early next month.

The Reserve Bank of India kept policy rates constant at 6.5 percent last month and forecasted retail inflation of 5.1 percent for the current fiscal year, with June quarter inflation of 4.6 percent.