Data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday showed retail inflation rising from 3.93% in May to 4.38% in June, broadly in line with market expectations. A Reuters poll of economists had projected consumer inflation at 4.3% for the month, with estimates ranging between 3.65% and 5.50%.
The June print is also the highest since India adopted its revised CPI series with a new base year and updated consumption basket earlier this year.
The Reserve Bank of India is mandated to maintain headline retail inflation at 4%, while allowing it to move within a tolerance band of 2% to 6%, for the five-year period from April 1, 2026, to March 31, 2031.
Retail food inflation stood at 5.32% in June compared with 4.78% in May. Rural food inflation was 5.45%, while urban food inflation came in at 5.09%.
Potato prices contracted 20.34% in June as against a 23.71% in May. Tomato prices plunged 31.92%, as against a 48.43% year-on-year jump in May.
Transport inflation was at 4.31% in May and transport services for goods inflation was at 7.70%.The inflation reading comes weeks after the Reserve Bank of India left the benchmark repo rate unchanged at 5.25% in its June monetary policy review, while retaining its neutral policy stance as policymakers balanced inflation risks against the need to support economic growth.
The central bank had also revised its inflation forecast for FY27 upward to 5.1% from 4.6% projected in April, citing persistent food price pressures, higher energy costs and uncertainties arising from global geopolitical developments.
Economists also warned that a sustained increase in global energy prices could widen India’s current account deficit, weaken the rupee and raise imported inflation, while an erratic monsoon could keep food prices elevated during the remainder of the year.
The inflation figures released on Monday are provisional and may be revised subsequently.