Retail inflation has risen for the sixth consecutive month, driven by increasing prices of food items, including potatoes and ginger. It reached 4.38% in June, up from 2.74% in January and 3.93% in May.
This marks the first time since January 2025 that inflation has surpassed the Reserve Bank of India’s (RBI) midpoint target of 4%. The Ministry of Statistics and Programme Implementation released these inflation figures on Monday, January 13.
Food Inflation Rose to 5.32% in June 2026
Food inflation—the rate of price increase for food items—climbed to 5.32% in June, up from 4.38% in May 2026.
Rising Inflation Raises Fears of Interest Rate Hikes
Although current inflation remains within the RBI’s tolerance band of 2% to 6%, further price increases could compel the central bank to raise interest rates. Such a move could impact the country’s economic growth in the coming quarters.
In June, the RBI had already raised its inflation forecast from 4.6% to 5.1%, citing the dual risks of a potential monsoon deficit due to El Niño conditions and rising energy prices.
No Year-on-Year Comparison Due to New Index
The current inflation data cannot be compared with the corresponding period last year because the index was reset in January of this year. A new series was launched with 2024 as the base year, recording a revised retail inflation rate of 2.74% in January.
Subsequently, a steady rise in prices was observed: 3.21% in February, 3.4% in March, 3.48% in April, and 3.93% in May. Under the old CPI series with a base year of 2012, the inflation rate stood at 1.33% in December and 0.71% in November.