Retail inflation slips to over six-year low of 2.1% in June

Retail inflation slipped to a more than six-year low of 2.1 per cent in June, mainly due to subdued prices of food items, including vegetables, pulses, meat, and milk, data by the Ministry of Statistics & Programme Implementation (MoSPI) said on Monday.

The Consumer Price Index-based inflation was 2.82 per cent in May and 5.08 per cent in June 2024.

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There is a decline of 72 basis points in the headline inflation of June in comparison to May. It is the lowest year-on-year inflation since January 2019.

Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for June is -1.06 per cent (Provisional). Corresponding inflation rates for rural and urban are -0.92 per cent and -1.22 per cent, respectively.

The significant decline in headline inflation and food inflation during June 2025 is mainly attributed to favourable base effect and decline in inflation of Vegetables, Pulses and Products, Meat and Fish, Cereals and products, Sugar and confectionery, Milk and products, and Spices, the MoSPI highlighted.

In the rural sector, a significant decline in headline and food inflation was observed in June, with the headline inflation being 1.72 per cent (Provisional) compared to 2.59 per cent in May.

The CFPI-based food inflation in the rural sector is observed as -0.92 per cent (Provisional) in June in comparison to 0.95 per cent in May.

In the urban sector, a significant decline to 2.56 per cent in June from 3.12 per cent in May was observed in headline inflation. Sharp decline is also observed in food inflation from 1.01 in May to -1.22 per cent (Provisional) in June 2025.

“While comfortable inflation opens room for further monetary easing, we expect the RBI to maintain a pause in the coming 1-2 meetings and remain watchful of the transmission ahead along with global uncertainties,” said Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.