Headline inflation in India remains virtually unchanged at 7.0% in June 2022
The headline retail consumer price index (CPI) grew by 7% y/y, keeping inflation steady from the previous month. This marks the sixth consecutive month the CPI has remained outside of the upper target band of the monetary policy committee. On the bright side, core inflation climbed down to 6%, reducing by almost 10bps. The CPI pertaining to food and beverages, which occupies the largest weight in the inflation basket, grew by 7.6% y/y in June, decelerating by 0.2pp from the previous month. The deceleration in the growth of CPI for miscellaneous items was more pronounced, from 6.8% y/y in May, to 6.3% y/y in June. The CPI for housing, which is the third largest by weight, after miscellaneous items, hastened its growth in June, to 3.9% y/y, by about 0.3pp. The CPI inflation pertaining to fuel and light, as well as clothing and footwear, accelerated in June, after a temporary deceleration in May, to 10.4% and 9.5%, respectively.
Under food and beverages, out of the four largest components, cereals and products, and milk and milk products, which are the two largest by weight, and collectively form about 35% of the total food and beverage basket, saw an uptick in inflation. The CPI for cereals and products grew by 5.7% y/y, a 0.4pp increase over the previous month, while that for milk and milk products grew by 6.1% y/y, recording an increase of 0.5pp. On the other side, inflation of vegetables, which had seen a persistent increase in inflation since January, eased to 17.4% in June. Over the same period, the retail inflation for prepared meals and snacks, which is the fourth largest by weight, after vegetables, also eased by 0.4pp, to 6.7%. Oils and fats, the CPI inflation for which, had soared until September 2021, continued to climb downwards, reaching 9.4% in June 2022. Some components of the food basket also experienced deflation, such as eggs, by 5.5%, and pulses and products, by 1%.
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Further data and analysis on India’s economy are available on the CEIC India Economy in a Snapshot – Q2 2022 report.