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Inflation is gradually taking a gigantic form. Even before the release of official retail inflation data, a survey revealed that the June figure may exceed the RBI’s target for the first time in 16 months. By the Reserve Bank That said, June’s retail inflation figure could exceed 4% for the first time in 16 months. Rising fuel prices, US-Iran war and weak monsoon could be the reasons. Most experts surveyed agreed that June’s retail inflation figure is likely to be higher than expected.

India’s consumer inflation could exceed the RBI’s target of 4% in June for the first time in 16 months, a Reuters poll showed. In the survey conducted between July 3 and 9, 37 economists forecast that retail inflation is likely to increase to 4.3% in June from 3.93% in May. Estimates range from 3.65% to 5.50% for government data due on July 13.

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A new base year was implemented from January

The latest retail of inflation The figures are based on India’s revised index, which includes a new base year of January and an updated consumer basket. The June figure will be the highest inflation record since the new series began. Societe Generale’s India economist Kunal Kundu says retail inflation figures have been on the rise in recent months due to gradual strengthening of the food, fuel and select services sectors. Commodity and energy prices are rising steadily in the global market, which is also affecting Indian inflation.

The effects of climate will compound the problem

According to the survey, if El Nino weakens India’s monsoon and disrupts crop production between June-September due to insufficient rainfall, the pressure on food supplies could increase. Retail fuel prices also remained high, as state-owned fuel retailers raised prices four times in May, raising transport and logistics costs. This means that rising oil prices have had an impact on inflation and food prices as well.

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The danger is not over yet

According to some economists, oil prices may rise again after the US-Iran war resumes. This may further increase the risk of inflation in the future. The RBI kept the repo rate unchanged at 5.25% in its policy committee meeting last month, which was in line with expectations. According to the latest survey, wholesale inflation is expected to ease only slightly to 9.15% in June from 9.68% in May. In addition, core inflation is also expected to be 3.95% in June. All these figures point to further increase in inflationary pressure in the coming period.