June retail inflation likely inched up to 4.6%: Mint poll
NEW DELHI : India’s retail inflation is likely to have inched up to 4.6% in June from a 25-month low of 4.25% in the previous month on account of higher food inflation driven by vegetable, pulses and cereal prices, showed a Mint poll of 19 economists. The poll predicts consumer price inflation (CPI) in a range of 4.1-4.8%, with all but two economists expecting inflation to rise. Official data is scheduled to be released on 12 July.
Inflation is expected to rise for the first time in five months. “We expect CPI inflation to have edged up due to fading base effects and a spike in food prices," said economists at Standard Chartered Bank, in a report dated 5 July. They expect food and beverage inflation to jump 4.6% in June from 3.3% in May.
If June print comes as predicted, the average inflation during the first quarter would be 4.52%, largely in line with the Reserve Bank of India’s prediction of 4.6%. However, going ahead, food prices remain a risk. Tomato prices have risen sharply in July, even crossing ₹100 per kg in several cities.
The Monetary Policy Committee in its 6-8 June meeting had noted that the future trajectory of headline inflation was likely to be shaped by the dynamics of the food basket. Food makes up nearly 40% of the CPI basket. While economists have attributed the rise in vegetable prices as seasonal and expect costs to come down during the monsoon, price pressures could still keep the rate-setting panel on its toes.
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