Retail inflation in June rises to three-month high of 4.81 pc

Retail inflation rose to a three-month high of 4.81 per cent in June, mainly on account of hardening prices of food, according to the government data. Inflation based on the Consumer Price Index (CPI) stood at 4.31 per per (revised upward from 4.25 per cent) in May and 7 per cent in June 2022.

The inflation, however, remains within the RBI's comfort level of below 6 per cent. The previous high CPI was in March at 5.66 per cent. Inflation for the food basket was at 4.49 per cent in June, higher than 2.96 per cent in May. The food basket accounts for nearly half of the CPI. Last month, the Reserve Bank kept policy rates unchanged at 6.5 per cent and projected retail inflation for the current fiscal to average at 5.1 per cent, with June quarter inflation pegged at 4.6 per cent.

Meanwhile, India's industrial production rose to 5.2 per cent in May from 4.5 per cent in April 2023, mainly due to good performance by the manufacturing and mining sectors, according to the official data released on Wednesday. The factory output growth measured in terms of the Index of Industrial Production (IIP) stood at 19.7 per cent in May 2022, mainly due to a lower base effect.

"The growth rates over corresponding period of previous year are to be interpreted, considering the unusual circumstances on account of COVID 19 pandemic since March 2020," an official statement explained. As per the IIP data released by the National Statistical Office (NSO), the manufacturing sector's output grew 5.7 per cent in May 2023 against a 20.7 per cent expansion a year ago.

During the April-May period of fiscal 2023-24, the growth in IIP works out to be 4.8 per cent, down from 12.9 per cent in the corresponding period a year ago.