E-Paper
India's retail inflation slightly up at 6.26% in June
The RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on the either side.
India's retail inflation marginally rose 6.26 per cent in June from a year ago compared to 6.3 per cent in May, government data released on Monday showed. According to the data released by the National Statistical Office (NSO), inflation in the food basket was 5.15 per cent in June compared to 5.01 per cent in May.
Inflation based on the Consumer Price Index (CPI) remained above the Reserve Bank of India's comfort level for the second month in a row. RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on either side.
Economists also said that Monday's June inflation print was above the upper range of the central bank's 2 per cent to 6 per cent target, but that price pressures appeared to be easing.
"The softer-than-expected inflation comes as a relief in an environment when the continuing accommodative stance remains a necessity to revive growth," news agency Reuters quoted Upasna Bhardwaj, an economist at Kotak Mahindra Bank, as saying. "We expect the MPC (Monetary Policy Committee) to draw comfort from relatively stable (inflation)," Bhardwaj also said.
Group chief economist Rupa Rega Nitsure of L&T Finance Holdings said that there "was no surprise in this data." "The Reserve Bank of India (RBI) too has made its approach and stance clear in the coming months," she told Reuters.
She also said that markets may suffer from temporary nervousness but "it will not sustain for long. Gradual revival in economic activity and liquidity assurance will restore the balance," according to the Reuters report.
High fuel prices and rising input costs for companies are likely to keep inflation elevated for some time, economists also said.
(With inputs from agencies)
