India’s June retail inflation picks up after easing of lockdown

June’s inflation remained above the mid-point of the Reserve Bank of India’s 2-6% target range, the Ministry of Statistics data showed on Monday.

The government had suspended the release of CPI inflation headline numbers for April and May due to insufficient data during the lockdown period.

Some economists expressed fear of rising price pressures amid lockdown, but said the central bank could still ease interest rates further after cutting repo rate by 115 basis points since March, in addition to providing liquidity support to address damage to the economy caused by the pandemic.

Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services, Mumbai, said the central bank’s rate cut decision would “depend on growth more than inflation figure because growth was still a worry.”

“Going ahead, as coronavirus led restrictions slightly recover and as supply crunch reduces, we may see CPI falling below 6%,” he said.