Retail inflation breaches 5 percent in June, may trigger rise in food prices

Taking a departure from the moderation, the retail inflation increased to 5.08% in June, according to recent government data. As per details, the year-on-year inflation rate based on all India Consumer Price Index (CPI) numbers is 5.08% for the month of June. The corresponding inflation rate for rural and urban is 5.66% and 4.39%, respectively, as per the press release.

This rise indicates a higher rate of price increase for goods and services compared to previous periods. Retail inflation, measured by the Consumer Price Index (CPI), reflects changes in the cost of living for consumers.

Data according to the press release

According to the government data released on Friday, retail inflation for cereal and products, meat and fish, eggs, milk and products, oils and fats, fruits and vegetables in particular, pulses and products, sugar, spices, prepared snacks, and sweets increased month over month.

Notably, the price data is collected through in-person visits by field personnel, after collecting the sample of 1114 metropolitan markets and 1181 villages throughout all states and territories.

Consumer Price Index (CPI) number on base 2012=100 for rural, urban and combined for the month of June 2024

Year-on-year inflation rate based on All India Consumer Price Index (CPI) number is 5.08% (Provisional) for the month of June, 2024

Corresponding inflation rate for… pic.twitter.com/RljKhLQxTS

— PIB India (@PIB_India) July 12, 2024

Reportedly, the data for the month of July 2024 will be released on August 12, 2024.

Inflation a concern

Rising food prices have always been a concern for Indian consumers with the food segment which is doubling year-on-year in June. The food inflation has doubled to 8.36 percent in the last month, which was 4.64 percent if it is compared with data from the same month of 2023. So, food prices will remain the main concern of the policymakers who are trying to bring that down to 4 percent on a sustainable basis.

After this, everyone will keep a close eye on the upcoming Union Budget by the third term Modi government which will be presented by Finance Minister Nirmala Sitharaman on July 23.

Surge in Gold prices

Meanwhile, among one of the major invested metal 'Gold' has also seen a surge in prices in past few days. According to the data, gold prices in India rose for the second day in a row on July 12, as the possibility that the Federal Reserve may start cutting interest rates in September grew due to US inflation data that was lower than anticipated. US gold prices were steady on Friday, but they could rise for a third week in a row.

According to GoodReturns, on July 12, the price of gold in India stood up at Rs 6,760 per gram for 22 karat gold and Rs 7,375 per gram for 24 karat gold (also called 999 gold).