NEW DELHI: Retail inflation rose to a four-month high in June, led by a spurt in prices of food and beverages, delaying any prospects of interest rate cuts for now, while industrial output growth surged to a seven-month high in May on the back of robust electricity sector expansion.
Data released by the National Statistical office (NSO) on Friday showed retail inflation, as measured by the consumer price index, rose an annual 5.1% in June, faster than the 4.8% in May and higher than the 4.9% in June 2023.Rural inflation was higher at 5.7%, while urban was at 4.4%.

The surge in food prices was led by vegetables that rose to a four-month high of 29.3%, which experts attributed to the impact on supplies due to the intense heatwave in some parts of the country. Inflation in pulses and products continued to be in double digits at 16.1%. According to HDFC Bank research, potato, onion and tomato inflation averaged 47.5%.
“Even though food inflation continues to remain a cause of concern, its outlook has brightened due to anticipation of a normal monsoon. However, the temporal and spatial distribution of monsoon and progress of the kharif sowing would be critical factors to monitor,” said Rajani Sinha, chief economist at ratings agency CareEdge.
Separate data showed IIP growth staging a robust rebound, led by the electricity sector, which rose 13.7% in May compared with a 0.9% increase last year. The manufacturing sector rose 4.6% in May, higher than the 3.9% in April but below the 6.3% in May last year. “The IIP outperformed expectations, with the year-on-year growth rising to a seven-month high, amid a better-than-anticipated growth in manufacturing output,” said Aditi Nayar, chief economist at ratings agency Icra.

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