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Business Standard
09-07-2025
- Business
- Business Standard
June retail inflation likely to have cooled further on food prices
India's consumer price index (CPI)-based retail inflation rate is likely to have cooled further in June, thus remaining below the 4 per cent target of the Reserve Bank of India (RBI) for a fifth consecutive month, giving the central bank wiggle room to focus on growth. Economists reckon that the decline is on account of easing prices in various categories of goods, especially food items, and a favourable base effect. In May, the retail inflation rate stood at a 75-month low of 2.82 per cent, while in June last year, it was 5.08 per cent. The National Statistics Office (NSO) on Monday will release the June CPI data. In its last bimonthly meeting in June, the RBI had revised downwards its CPI inflation forecast for 2025-26 to 3.7 per cent, with the Q1 (April-June) inflation rate remaining as low as 2.9 per cent. 'The BoB Essential Commodities Index (BoB ECI) was in deflation territory in June as well, declining by 1.8 per cent, on a y-o-y basis. The major support had come from vegetables and pulses, buoyed up by better production,' he added. Echoing similar views, Aditi Nayar, chief economist, Icra Ratings, said that regardless of the seasonal sequential uptick in food prices typically seen in June, the inflation print in the food and beverages segment was expected to ease to sub -1 per cent in the month for the first time in over six years, aided by a high base. 'This would help pull down the headline inflation number further to 2.5 per cent, implying a print of 2.8 per cent for Q1 FY2026, a shade below the Monetary Policy Committee's forecast,' added Nayar. The core inflation rate, which excludes the food and fuel components, is expected to have edged up in June slightly to 4.5 per cent, indicating signs of steady demand conditions in the economy. 'The rise in the core inflation rate reflects higher gold prices and adverse base effects. Meanwhile, the 'core core inflation rate', which excludes gold, silver, petrol and diesel, is expected to have remained subdued due to a negative output gap,' said IDFC Bank Chief Economist Gaura Sengupta. 'We estimate the CPI to remain at 2.25 per cent in June and for FY26, we expect it to average at 3 per cent,' added Sengupta. In a report on Tuesday, rating agency Crisil said home-cooked meals too turned cheaper in June, demonstrated by the fact that the cost of a vegetarian thali fell 8 per cent, driven by a sharp drop in prices of tomatoes, potatoes, and onion, while the cost of a non-vegetarian thali declined by about 6 per cent, aided by drop in broiler prices. Sabnavis said the usual seasonal buildup in TOP (tomato, onion and potato) prices was visible with the sharpest upward correction witnessed for tomatoes and some stickiness in core inflation was expected to prevail because of frontloading of consumption demand due to tax benefits given in the Budget. 'The TOP trajectory requires close monitoring because June and July have the usual seasonal trend of reversal in prices for these items as one harvesting period is at its end. However, the outlook for inflation remains comforting for now,' he added.
India Gazette
05-07-2025
- Business
- India Gazette
Inflation likely to align with RBI's projection in Q1: BoB report
New Delhi [India], July 5 (ANI): Inflation is expected to remain in line with the Reserve Bank of India's (RBI) projections in the first quarter (Q1) of Financial Year FY26, driven by a favourable statistical base and continued deflation in essential commodities, according to the latest report by Bank of Baroda. Taking the influencing factors into consideration the RBI policy projects CPI inflation for the financial year 2025-26 at 3.7 per cent, with Q1 at 2.9 per cent; Q2 at 3.4 per cent; Q3 at 3.9 per cent; and Q4 at 4.4 per cent The BoB Essential Commodities Index (BoB ECI) remained in deflationary territory in June 2025, declining by -1.8 per cent year-on-year (YoY), compared to a -0.6 per cent drop in May 2025. This marks the third consecutive month of deflation, largely driven by sharp price corrections in vegetables and pulses, buoyed by improved production and favourable supply conditions. 'The outlook for inflation remains comforting for now, as it has the handholding of a favourable statistical base. This is likely to continue in Jul'25 as well. We expect to settle CPI to settle at 2.6 per cent in Jun'25,' the report noted, suggesting the RBI will have some room to focus on growth-oriented measures in the near term. Vegetables under the TOP (Tomato, Onion, Potato) category led the deflation trend. Retail prices for onions and potatoes dropped significantly by -26.1 per cent and -20.3 per cent respectively in June, while tomatoes fell at a slightly slower pace of -24 per cent. Among pulses, Tur/Arhar recorded the steepest annual decline of -23.8 per cent, marking the fourth consecutive month of double-digit deflation. Other pulses such as Urad, Masoor, and Moong also showed consistent downward trends, supported by improved sowing in the ongoing Kharif season. Cereals, particularly rice, also saw retail prices soften, falling by -5.1 per cent in June. Prices of miscellaneous items like salt and jaggery remained largely stable, while edible oils continued to remain elevated, albeit supported by favourable international pricing trends. On a month-on-month (MoM) basis, the BoB report noted a modest uptick of 0.6 per cent in June. However, the seasonally adjusted MoM figure actually declined by -0.7 per cent, indicating that much of the sequential rise was seasonal in nature. Tomato prices rose by a sharp 36.1 per cent in June compared to May, marking the highest monthly gain since October 2024 -- a result of early monsoon impact and typical seasonal price shifts. Although onion prices remained relatively stable, they witnessed a much softer sequential decline of -0.4 per cent compared to -9.8 per cent in May. The report cautioned that June and July typically mark the seasonal reversal in TOP prices, with an upward correction in prices expected. It emphasised the need for better supply chain infrastructure, including cold storage and more localised vegetable clusters, to help moderate price volatility going forward. With inflation well below the RBI's upper tolerance band and supply-side pressures largely under control, the central bank appears to have a temporary breather, allowing it to stay focused on stimulating growth in the months ahead, the report added. (ANI)
Economic Times
05-07-2025
- Business
- Economic Times
Inflation likely to align with RBI's projection in Q1: Bank of Baroda report
ANI Inflation likely to align with RBI's projection in Q1: BoB report Inflation is expected to remain in line with the Reserve Bank of India's (RBI) projections in the first quarter (Q1) of Financial Year FY26, driven by a favourable statistical base and continued deflation in essential commodities, according to the latest report by Bank of the influencing factors into consideration the RBI policy projects CPI inflation for the financial year 2025-26 at 3.7 per cent, with Q1 at 2.9 per cent; Q2 at 3.4 per cent; Q3 at 3.9 per cent; and Q4 at 4.4 per cent The BoB Essential Commodities Index (BoB ECI) remained in deflationary territory in June 2025, declining by -1.8 per cent year-on-year (YoY), compared to a -0.6 per cent drop in May 2025. This marks the third consecutive month of deflation, largely driven by sharp price corrections in vegetables and pulses, buoyed by improved production and favourable supply conditions."The outlook for inflation remains comforting for now, as it has the handholding of a favourable statistical base. This is likely to continue in Jul'25 as well. We expect to settle CPI to settle at 2.6 per cent in Jun'25," the report noted, suggesting the RBI will have some room to focus on growth-oriented measures in the near under the TOP (Tomato, Onion, Potato) category led the deflation trend. Retail prices for onions and potatoes dropped significantly by -26.1 per cent and -20.3 per cent respectively in June, while tomatoes fell at a slightly slower pace of -24 per cent. Among pulses, Tur/Arhar recorded the steepest annual decline of -23.8 per cent, marking the fourth consecutive month of double-digit deflation. Other pulses such as Urad, Masoor, and Moong also showed consistent downward trends, supported by improved sowing in the ongoing Kharif season. Cereals, particularly rice, also saw retail prices soften, falling by -5.1 per cent in June. Prices of miscellaneous items like salt and jaggery remained largely stable, while edible oils continued to remain elevated, albeit supported by favourable international pricing a month-on-month (MoM) basis, the BoB report noted a modest uptick of 0.6 per cent in June. However, the seasonally adjusted MoM figure actually declined by -0.7 per cent, indicating that much of the sequential rise was seasonal in prices rose by a sharp 36.1 per cent in June compared to May, marking the highest monthly gain since October 2024 -- a result of early monsoon impact and typical seasonal price shifts. Although onion prices remained relatively stable, they witnessed a much softer sequential decline of -0.4 per cent compared to -9.8 per cent in May. The report cautioned that June and July typically mark the seasonal reversal in TOP prices, with an upward correction in prices expected. It emphasised the need for better supply chain infrastructure, including cold storage and more localised vegetable clusters, to help moderate price volatility going forward. With inflation well below the RBI's upper tolerance band and supply-side pressures largely under control, the central bank appears to have a temporary breather, allowing it to stay focused on stimulating growth in the months ahead, the report added.
Time of India
05-07-2025
- Business
- Time of India
Inflation likely to stay within RBI's target in Q1 FY26; vegetable, pulse deflation drives trend
Representative image Retail inflation is expected to remain comfortably within the Reserve Bank of India 's (RBI) projections for the first quarter of FY26, supported by a favourable base effect and continued deflation in essential food items, according to a recent report by Bank of Baroda. As per news agency ANI, the central bank's policy outlook currently pegs Consumer Price Index (CPI) inflation at 3.7% for FY26, with Q1 forecasted at 2.9%, followed by 3.4%, 3.9% and 4.4% in the subsequent quarters. In June 2025, the Bank of Baroda Essential Commodities Index (BoB ECI) recorded a year-on-year decline of 1.8%, deepening from a 0.6% fall in May. This marks the third consecutive month of deflation, largely driven by steep price corrections in vegetables and pulses, backed by improved production and favourable supply dynamics. Vegetables from the TOP category (Tomato, Onion, Potato) were key drivers. Onion and potato retail prices dropped sharply by 26.1% and 20.3%, respectively, while tomato prices fell by 24% year-on-year. Among pulses, Tur/Arhar plunged by 23.8%, with other varieties like Urad, Masoor, and Moong also reflecting sustained price drops due to better Kharif sowing, reported ANI. The report expects June CPI inflation to settle at 2.6%, providing room for the RBI to focus on growth-friendly policies. 'The outlook for inflation remains comforting for now, as it has the handholding of a favourable statistical base,' the report stated, adding that July could see similar trends. On a month-on-month basis, the BoB ECI saw a nominal 0.6% increase in June. However, the seasonally adjusted figure dropped 0.7%, indicating the sequential rise was largely seasonal. For instance, tomato prices jumped 36.1% from May, the highest since October 2024, due to monsoon-linked supply shifts. Onion prices were stable, dipping just 0.4% in June after a sharper drop in May. The report, however, cautioned that TOP prices usually begin to reverse upwards in June and July, and urged for strengthened supply chain infrastructure, including cold storage and localised clusters, to reduce price volatility. Contributing to a stable inflation environment is a strong start to Kharif sowing, which rose 11.3% year-on-year, led by rice and pulses. Improved monsoon distribution has also helped, with June rainfall reaching 109% of the Long Period Average (LPA) and key agri-states like Rajasthan, Gujarat, and Madhya Pradesh receiving surplus rainfall. With food prices easing and supply-side pressures under control, inflation remains well below the RBI's upper tolerance band of 6%, giving the central bank a window to maintain its growth focus, the Bank of Baroda report concluded. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
05-07-2025
- Business
- Time of India
Inflation likely to align with RBI's projection in Q1: Bank of Baroda report
Inflation is expected to remain in line with the Reserve Bank of India's (RBI) projections in the first quarter (Q1) of Financial Year FY26, driven by a favourable statistical base and continued deflation in essential commodities, according to the latest report by Bank of Baroda . Taking the influencing factors into consideration the RBI policy projects CPI inflation for the financial year 2025-26 at 3.7 per cent, with Q1 at 2.9 per cent; Q2 at 3.4 per cent; Q3 at 3.9 per cent; and Q4 at 4.4 per cent The BoB Essential Commodities Index (BoB ECI) remained in deflationary territory in June 2025, declining by -1.8 per cent year-on-year (YoY), compared to a -0.6 per cent drop in May 2025. This marks the third consecutive month of deflation, largely driven by sharp price corrections in vegetables and pulses, buoyed by improved production and favourable supply conditions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 모르면 무조건 후회하는 경추베개 "속임수" 공개 김진석 생활기록 더 알아보기 Undo "The outlook for inflation remains comforting for now, as it has the handholding of a favourable statistical base. This is likely to continue in Jul'25 as well. We expect to settle CPI to settle at 2.6 per cent in Jun'25," the report noted, suggesting the RBI will have some room to focus on growth-oriented measures in the near term. Vegetables under the TOP (Tomato, Onion, Potato) category led the deflation trend. Retail prices for onions and potatoes dropped significantly by -26.1 per cent and -20.3 per cent respectively in June, while tomatoes fell at a slightly slower pace of -24 per cent. Among pulses, Tur/Arhar recorded the steepest annual decline of -23.8 per cent, marking the fourth consecutive month of double-digit deflation. Other pulses such as Urad, Masoor, and Moong also showed consistent downward trends, supported by improved sowing in the ongoing Kharif season. Live Events Cereals, particularly rice, also saw retail prices soften, falling by -5.1 per cent in June. Prices of miscellaneous items like salt and jaggery remained largely stable, while edible oils continued to remain elevated, albeit supported by favourable international pricing trends. On a month-on-month (MoM) basis, the BoB report noted a modest uptick of 0.6 per cent in June. However, the seasonally adjusted MoM figure actually declined by -0.7 per cent, indicating that much of the sequential rise was seasonal in nature. Tomato prices rose by a sharp 36.1 per cent in June compared to May, marking the highest monthly gain since October 2024 -- a result of early monsoon impact and typical seasonal price shifts. Although onion prices remained relatively stable, they witnessed a much softer sequential decline of -0.4 per cent compared to -9.8 per cent in May. The report cautioned that June and July typically mark the seasonal reversal in TOP prices, with an upward correction in prices expected. It emphasised the need for better supply chain infrastructure , including cold storage and more localised vegetable clusters, to help moderate price volatility going forward. With inflation well below the RBI's upper tolerance band and supply-side pressures largely under control, the central bank appears to have a temporary breather, allowing it to stay focused on stimulating growth in the months ahead, the report added.
