India’s consumer price index (CPI) inflation rose to 4.81% in June 2023, exceeding expectations. The main reason for the rise in inflation was a jump in food prices, which increased by 4.49% in June. Other major contributors to inflation were rising prices for fuel, housing, and clothing.
The Reserve Bank of India (RBI) has set an inflation target of 4% with a tolerance band of 2% on either side. The June inflation reading is the first time since January 2023 that inflation has breached the RBI’s upper tolerance limit.
The RBI is likely to keep its policy rates unchanged in its next meeting in August, but it may start to tighten monetary policy in the coming months if inflation continues to rise.
Here are some additional details from the article:
* The rise in food inflation was driven by higher prices for vegetables, cereals, and pulses.
* Fuel prices rose by 3.17% in June, driven by higher international crude oil prices.
* Housing inflation rose by 3.91% in June, driven by higher rents and prices of building materials.
* Clothing inflation rose by 2.79% in June, driven by higher prices of fabrics and garments.
The article also notes that the rise in inflation is likely to have a negative impact on the purchasing power of consumers and could lead to slower economic growth.