India’s annual retail inflation rose to 4.81% in June from 4.31% the previous month, government data showed on Wednesday, snapping four months of easing due to surging prices for vegetables.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose to 4.49% against a revised 2.96% in May.
Erratic and incessant rainfall in northern India could push vegetable prices higher in the coming months. Vegetable prices increased 12% on a month-on-month basis in June.
The inflation, however, remains within the Reserve Bank of India’s comfort level of below 6 per cent.
The government has tasked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side. The central bank mainly factors in the CPI to arrive at its bi-monthly monetary policy decision. The next policy review is scheduled early next month.
Last month, the Reserve Bank kept policy rates unchanged at 6.5 per cent and projected retail inflation for the current fiscal to average at 5.1 per cent, with June quarter inflation pegged at 4.6 per cent.