Inflation climbs to 3-month high of 4.81% in June; blame on food prices

Rising food prices pushed up retail inflation to a three-month high of 4.81 per cent in June, government data has revealed.

Inflation based on the Consumer Price Index (CPI) stood at 4.31 per cent (revised upward from 4.25 per cent) in May and 7 per cent in June 2022.

The inflation, however, remains within the RBI’s comfort level of below 6 per cent.

The previous high CPI was in March, at 5.66 per cent.

Also read: Retail inflation dips to 25-month low of 4.25% in May as food, fuel prices soften

The government has tasked the central bank to ensure that 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 for early next month.

Inflation for the food basket was at 4.49 per cent in June, higher than 2.96 per cent in May. The food basket accounts for nearly half of the CPI.

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 the June quarter inflation pegged at 4.6 per cent.

(With agency inputs)