BENGALURU: India’s retail inflation rose 6.26per cent in June from a year ago, government data released on Monday showed.
Analysts in a Reuters poll had predicted annual inflation at 6.58per cent for the month.
COMMENTARY
SREEJITH BALASUBRAMANIAN, ECONOMIST AT IDFC AMC, MUMBAI
“June print could possibly be the peak year-on-year reading for a few months, aided by base effects which reverse after November. Fuel price change, trajectory of food prices, ongoing stickiness of core inflation (particularly for services), nature of pent up demand, any spill over of input price pressures onto the end consumer and the path of the pandemic would all matter.”
ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURGAON
“Following today’s CPI inflation print, we expect the inflation forecasts to be revised upwards in the next Monetary Policy Committee (MPC) review, amid a status quo in the rates and stance, albeit with an underlying tone of uneasiness in the commentary.”
“In our view, the tussle between supporting the nascent, incomplete revival in growth and preserving the anchoring of inflationary expectations will continue.”
“The individual MPC members may have a varying tolerance for inflation that persists above the 6per cent target beyond a quarter, during the revival phase. If the CPI inflation remains entrenched above the 6per cent upper threshold in the next two prints (July-August 2021), a preponement of rate normalisation can’t be ruled out.”
SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI
“The trajectory of inflation from here till October should be downwards and by October we won’t be surprised if inflation falls significantly below the 4per cent mark.”
“As far as the Reserve Bank of India’s (RBI’s) liquidity and interest rate policy is concerned that’s not going to change during the current calendar year, perhaps during the current financial year as well.”
“For the RBI, growth will still remain the main focus. The fact of the matter is that there is still a significant amount of demand destruction and there is significant amount of excess capacity, particularly in manufacturing.”
“So for India, the trend for inflation should be downwards at least till October. And we don’t think inflationary concern is going to be a major macroeconomic challenge in the in the near term.”
UPASNA BHARDWAJ, SENIOR ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“The softer than expected inflation comes as a relief in an environment when the continuing accommodative stance remains a necessity to revive growth.”
“We expect the MPC to draw comfort from relatively stable, although still high inflation”
SUVODEEP RAKSHIT, SENIOR ECONOMIST, KOTAK INSTITUTIONAL EQUITIES, MUMBAI
“The sequential increase in June prices has been much milder than the sharp spike seen in May. While the seasonal increase in vegetables prices continued along with eggs, and oils and fat, the increase in most other food items were much softer. Core inflation saw some price corrections in recreation and much milder increases across the board compared to May.”
“Broadly, even as price correction was not yet visible, the price pressures are reducing. Inflation seems set to track lower towards 5.5per cent over the next few months.”
(Reporting by Nallur Sethuraman and Rama Venkat in Bengaluru, Aftab Ahmed in New Delhi; Editing by Rashmi Aich)
