Retail inflation rises eight-month high to 3.18% in June on higher food prices; IIP growth slows to 3.1% in May

Retail inflation rate hit an eight-month high in June on higher food prices, the government said on Friday, but stayed below the RBI’s medium-term target of 4 percent for an eleventh straight month. Annual retail inflation in June was 3.18 percent, up from 3.05 percent in the previous month, but below analyst forecasts. A Reuters poll had predicted a retail inflation rate of 3.20 percent for June. The retail inflation based on the Consumer Price Index (CPI) stood at 3.05 percent in May and 4.92 percent in June 2018, PTI reported. The retail inflation is on the rise since January this year. As per the CPI data released by the Central Statistics Office (CSO), the food inflation was 2.17 percent in June 2019, up from 1.83 percent in the preceding month. [caption id=“attachment_4258303” align=“alignleft” width=“380”] Representational image.. AFP.[/caption] Inflation in protein-rich food items, like egg, meat and fish, was higher in June compared to the previous month. However, the rate of price rise in vegetables and fruits was slower. The Reserve Bank of India mainly factors in retail inflation while deciding the bi-monthly monetary policy. Meanwhile, industrial production grew at 3.1 percent in May, mainly on account of improvement in power generation, according to official data released on Friday. The Index of Industrial Production (IIP) had expanded by 3.8 percent in May 2018. The expansion in power generation sector stood at 7.4 percent compared to 4.2 percent in the year-ago month. Mining growth was at 3.2 percent in May as against 5.8 percent in the corresponding month of the last fiscal. However, there was a slowdown in the manufacturing sector, which grew at 2.5 percent in May compared to 3.6 percent a year ago. (With agency inputs)