June inflation News

A high reading for June should cement expectations for the central bank to raise rates as early as August after its 25 basis points hike last month to try and control potential risks caused by higher inflation.

 Retail inflation shot up to nearly 2 year high of 6.07 per cent in July, well above the RBI's comfortable level, on surge in prices of food items as demand for sugar, oil & fats and spices rose ahead of the festival season.

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With wholesale inflation slipping to (-)2.4 percent in June, India Inc today demanded a deeper cut in key policy rates by RBI to stimulate demand and boost investments, at a time when industrial growth has slowed down.

Retail inflation surged to eight month high of 5.4 percent in June mainly due to costlier food items limiting the room for RBI to cut rates next month.

The food inflation dropped to 5.88 percent in June 2014 from 7.66 percent in May. The food inflation was 14.86 percent in June 2013.

India's CPI inflation in June 2014 dipped to a 30-month low of 7.31 percent mainly on fall in prices of food items, including cereals, meat and vegetables.

While retail inflation in June touched its lowest mark at 7.31 percent since January 2012, the wholesale price based index slid to four-month low of 5.43 percent mainly because of easing prices of vegetables.

The ease in wholesale price index based inflation in June is "temporary" and is likely to accelerate going ahead due to poor rainfall and higher vegetable prices, India Ratings and Research said Monday.

Moderation in inflation for the month of June is an outcome of recent measures like crackdown on hoarders taken by the Narendra Modi-led government, and could be an indication of economic recovery being round the corner, India Inc said Monday.

The Wholesale Price Index based inflation declined in June after touching 5-month high of 6.01 percent in May. It was 5.16 percent in June 2013.

The growing risk that drought will shrivel summer crops could encourage the Reserve Bank of India to keep interest rates on hold.

Inflation has been far below the ECB`s target of just under 2.0 percent, threatening its statutory obligation to ensure price stability.