A worker loaded consumer goods onto a supply cart at Kolkata wholesale market in India on November 11, 2024.
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Government data showed on Monday that consumer inflation in India continued to ease in June, hitting a 2.10% higher than expected.
Title inflation extended its slide after it fell to a six-year low in May as food prices continued to decline. Reuters surveyed economists and predicted inflation to be 2.5% in June.
The consumer price index fell for the eighth month in a row for six consecutive months.
Food inflation was -1.06% in June, compared with 0.99% in May.
The inflation data provide more room for the Reserve Bank of India to continue to relax its monetary policy after a 50 basis point drop in May.
RBI Governor Sanjay Malhotra explain During the spring crop season, recorded wheat yields and higher critical legume harvests “should ensure adequate critical food supply”, thereby increasing the prospect of further decline in food inflation.
“With the help of good weather results, we expect inflation to average about 2.5% over the next six months. Over the past three years, high-base, strong cereal production will help keep food inflation going for longer,” HSBC said in a note on June 30.
“A good monsoon will help curb inflation, increase real wages and increase purchasing power for consumers in the informal sector,” HSBC said.
In the quarter ended March, growth in domestic consumption will accelerate India’s economic growth rate by 7.4%.
However, Malhotra warned that the country needs to be aware of weather-related uncertainties, as well as concerns about tariffs and their impact on global commodity prices.
India has been in talks with the United States to reach a trade deal before President Donald Trump’s tariff deadline on August 1, and the country failed to invite the country’s import tariffs of 26%.
According to Indian media reports Last week, the trade delegation was expected to travel to Washington for talks after Trump sent a tariff letter to the country early last week.
New Delhi earlier this month Reuters reported, It said Washington’s 25% tariff on cars and certain auto parts would affect India’s $2.89 billion exports.
