Retail inflation nudges up to 5.40% in June

Retail inflation rose to eight-month high of 5.4 per cent in June on costlier food items, fuel, housing, clothing and footwear even as prices of sugar and confectionery items eased during the month. The retail inflation measured in terms of Consumer Price Index (CPI) was at 5.01 per cent in May.

The rate of price rise was at 6.77 per cent in June last year. Prices of pulses rose by 22.24 per cent in June over the same month last year, as per the data released by Central Statistics Office (CSO) on Monday. The overall food inflation also increased to 5.48 per cent during the month under review, from 4.8 per cent in May. However, it was lower than food inflation of 7.21 per cent in June last year. The inflation for fruit and vegetables was 3.51 per cent and 5.37 per cent, respectively, in June. Among others, milk and its products were costlier by 7.18 per cent in June over the same month last year.

Prices of protein-rich items such as 'meat and fish' rose by 6.99 per cent, while spices turned costlier by 9.71 per cent in the month. Prices of prepared snacks and meals rose by 7.84 per cent, clothing and footwear category by 6.34 per cent, housing by 4.48 per cent and fuel and light by 5.92 per cent.

Among other categories, oils and fats prices rose by 3.06 per cent, cereals and products by 1.98 per cent, while that of egg rose by 5.09 per cent in June. The prices of sugar and confectionery items fell by 8.55 per cent in June compared to same month last year. The Reserve Bank, which tracks retail inflation as a benchmark for its monetary policy, said earlier last month that price rise was still a worry for the central bank.

RBI expects inflation to rise to 6 per cent by January 2016. The central bank is scheduled to announce third bi-monthly monetary policy on August 4.