After 17 months, retail inflation crossed 4% in June; food inflation at 5.32%

3 min readJul 13, 2026 04:54 PM IST

CPI inflation averaged 3.9% in April-June as against the RBI’s latest forecast of 4.2%. (File Photo)

Prices for Indian households rose 4.38% in June – the most in one-and-a-half years – on the back of a continued rise in food prices. According to data released Monday by the Ministry of Statistics and Programme Implementation (MoSPI), food inflation in the country rose to 5.32% last month from 4.78% in May.

At 4.38%, the June headline inflation rate, as measured by the Consumer Price Index (CPI), is higher than May’s 3.93%. Inflation, which is the year-on-year change in prices, has now risen every month in 2026. The last time it was higher was in December 2024, when it stood at 5.22%. However, that figure is as per the old CPI series which had 2012 as the base year. The new series, data for which begins from January this year, has 2024 as the base year for prices and incorporates new methods to calculate certain components of the inflation rate as well as new data sources.

While the old and new data series are not strictly comparable, this is the first time since January 2025 that consumer prices have risen by more than 4%, which is the Reserve Bank of India’s (RBI) medium term target. As per the central bank’s legal mandate, it must target a 4% inflation rate in a band of 2-6%.

CPI inflation averaged 3.9% in April-June as against the RBI’s latest forecast of 4.2%.

The Consumer Food Price Index (CFPI) rose 1.7% last month compared to May, compared to a 1% month-on-month rise in overall prices. Transport inflation, meanwhile, rose sharply to 4.31% in June from 1.75% in May, with the index for the transport category rising 2.6% month-on-month.

The month-on-month increase in the price indices of any category of goods and services is indicative of the momentum in prices. This is a better indicator of how prices are moving as opposed to the inflation rate, which measures prices compared to last year.

“The risk of further fuel-price increases has diminished as oil prices have retreated from their recent highs, although a rapid reversal also looks unlikely given the fragile US-Iran peace process. Food inflation should also rise as the weak monsoon and confirmed El Niño threaten crop yields, while higher fertiliser costs add to price pressures. We therefore continue to expect headline inflation to rise over the coming months, albeit less sharply than we expected in early June,” Alexandra Hermann Prasad, Lead Economist at Oxford Economics, said.

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According to Prasad, the June inflation data “reinforces the RBI’s intention to remain on hold in August”.

“The June meeting minutes suggest policymakers remain reluctant to tighten in response to a largely supply-driven inflation shock while underlying demand pressures stay contained. We still expect two 25 bps repo rate hikes in Q4, although the risks are tilted towards a later and shallower tightening cycle,” Prasad added.

The RBI’s Monetary Policy Committee (MPC), on June 5, had retained the policy repo rate at 5.25%. The central bank had raised its inflation forecast for 2026-27 to 5.1% from 4.6%, with Governor Sanjay Malhotra warning there are indications that average crude oil prices this fiscal would be “substantially higher” than the $85 per barrel.

Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy.

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