HindustanTimes Thu,28 Aug 2014

Food inflation drops in June, monsoon may cut short relief

HT Correspondent, Hindustan Times  New Delhi, July 15, 2014
First Published: 01:07 IST(15/7/2014) | Last Updated: 08:14 IST(15/7/2014)

Latest inflation data released on Monday could give the government some cheer.  India’s wholesale inflation rate grew at its slowest pace in five months at 5.43% in June, while retail inflation — which captures shop-end prices — grew at 7.31% during the month, its lowest in 30 months, driven down by lower food prices.

Wholesale food inflation rate fell to 8.1% in June from 9.50% in the previous month and retail food inflation grew at a slower 7.90% compared to 9.40% in May, indicating that recent efforts, including export curbs on onions and a crackdown on hoarders, may have contained further spike in prices.

Experts, however, cautioned that deficient monsoon rains — critical for the summer-sown kharif crop — could fan prices. High inflation could make the RBI, which presents its credit policy review in August, hesitant about cutting interest rates, needed to boost economic growth.

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