India's retail inflation drops to 2.1% in June, lowest in 6 years

India’s retail inflation declined to a 77-month low of 2.1 percent in June, down from 2.8 percent in the previous month. The decrease was mainly due to falling food prices, as per government data released on July 14.

Wholesale inflation also dropped to a near two-year low of -0.13 percent in June. Retail food inflation hit a 74-month low, entering deflationary territory for the first time since April 2019.

Vegetables were 19 percent cheaper than last year, and pulses declined by 12 percent year-on-year, contributing to the fall in food prices. However, oils and fruits saw inflation rates of 17.8 percent and 12.6 percent, respectively.

Meat and fish prices continued to decline, while egg prices rose by 2.6 percent, reaching a six-month high. Clothing and footwear inflation eased to 2.55 percent from 2.67 percent in May.

Healthcare services, transportation services, and gold prices increased during the month. The Reserve Bank of India (RBI) has room to ease rates due to the subdued inflation environment. The Monetary Policy Committee (MPC) has cut rates three times since February, with the repo rate now at 5.5 percent.

For the April–June quarter, headline inflation averaged 2.7 percent, below the RBI’s estimate of 2.9 percent for Q1 FY26. Economists predict this trend to continue, but expect the RBI to maintain rates for the next 1-2 meetings.

According to the source: Moneycontrol.