Inflation spurts to 16-month high of 3.9%

“FOOD & BEVERAGES inflation increased as the favourable base effect from last year waned and due to a seasonal uptick. Heatwaves across several regions also adversely impacted the supply of several food items pushing up inflationary pressures. Amid the West Asia conflict and elevated energy prices, the retail fuel prices have been adjusted upward resulting in higher transport inflation,” wrote Rajani Sinha, chief economist at CareEdge Ratings.

- 

In the monetary policy review earlier this month, the Reserve Bank of India (RBI) revised the retail inflation projection for FY27 to 5.1% from 4.6%, citing mounting input costs and higher global energy and fuel prices. For the current quarter (April-June), it forecast an inflation rate of 4.2%.

According to Crisil Principal Economist Dipti Deshpande, rising input costs for producers — reflected in the wholesale price index inflation of 8.3% in April — are now increasingly feeding into consumer prices. “The impact of the West Asia conflict, which has now entered its fourth month in June, is therefore starting to percolate household budgets,” she added.