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High food prices push retail inflation to eight-month high of 3.18% in June

The retail inflation, calculated on the basis of Consumer Price Index (CPI), continued to climb during the month of June 2019, reaching an eight-month high of 3.18 per cent

twitter-logo BusinessToday.In   New Delhi     Last Updated: July 13, 2019  | 07:11 IST
High food prices push retail inflation to eight-month high of 3.18% in June
Retail inflation, calculated on the basis of Consumer Price Index, has been on the rise since January this year.

The retail inflation continued to climb during the month of June 2019, reaching an eight-month high of 3.18 per cent. The retail inflation figures during the year-ago period in June 2018 were 4.92 per cent, and 3.05 per cent during May 2019.The retail inflation, calculated on the basis of Consumer Price Index (CPI), has been on the rise since January this year.

The CPI data released by the Central Statistics Office (CSO) shows that the food inflation was 2.17 per cent in June 2019, up from 1.83 per cent in the preceding month. Inflation in protein rich food items, like egg, meat and fish, was higher in June compared to the previous month. However, the rate of price rise in cereals and products, vegetables and fruits was slower.

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"The inflation rate of June stands at 3.18 percent, the highest rate in the last eight months. Food inflation in the country is also increasing, crossing the 2 percent growth rate. However, the increasing vegetable prices, a worrying factor to the overall food inflation has slowed down. The growth rate of vegetable prices declined from 5.46 percent in May to 4.66 percent in June," said Deepthi Mathew, Economist, Geojit Financial Services.

The Reserve Bank of India mainly factors in the retail inflation while deciding the bi-monthlhy monetary policy. In its last meet on June 6, 2019, the Monetary Policy Committee (MPC) had lowered key repo rate by 25 bps to 5.75 per cent, its third consecutive policy rate cut, and changed its stance to "accomodative". However, continued increase in inflation levels might limit the chances of further policy rate cuts in the future.

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Meanwhile, the Index of Industrial Production increased by 3.1 per cent on an annual basis in May to 133.6. The cumulative growth for the period April-May 2019 over the corresponding period of the previous year stands at 3.7 percent, a statement by the CSO said.

"In terms of industries, twelve out of the twenty three industry groups in the manufacturing sector have shown positive growth during the month of May 2019 as compared to the corresponding month of the previous year," it further added.

(Edited by Vivek Punj)

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