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.