"Inflation Cools to 77-Month Low: Food and Fuel Prices Bring Relief in June"

 Inflation Hits 77-Month Low in June as Food and Crude Prices Ease

Inflation in India continued its downward slide in June, offering some much-needed relief to consumers and policymakers alike. Retail inflation, measured by the Consumer Price Index (CPI), dropped to a 77-month low of just 2.1% — the lowest since January 2019. Meanwhile, wholesale inflation, tracked via the Wholesale Price Index (WPI), actually fell into negative territory for the first time in nearly two years, driven largely by falling food and crude oil prices.

According to data released by the Ministry of Statistics and Programme Implementation, food inflation has now eased for eight straight months. In June, the food and beverages component of the CPI actually recorded a slight deflation of 0.2%. This marks a significant turnaround from June 2024, when food inflation was at a steep 8.4%.

So, what’s behind this consistent drop? Economists say a combination of favorable factors is at play.

“In the food basket, we’ve seen prices fall for key items like vegetables, pulses, spices, and meat,” said Rajani Sinha, Chief Economist at CareEdge Ratings. She added that food inflation is likely to stay low in the coming months, supported by strong agricultural output and a favorable comparison base from last year.

The fuel and light category, another key part of the CPI, also saw inflation slow to 2.55% in June, down from 2.8% in May. Interestingly, this moderation comes even though the base inflation rate for June last year was already in negative territory at -3.6%. This highlights just how stable fuel prices have been despite global volatility.

Not all segments of the CPI saw a decline, however. Inflation in housing saw a small increase, moving up to 3.24% in June from 3.16% in May. Meanwhile, the paan, tobacco, and intoxicants category stayed flat at 2.4%.

On the wholesale front, the picture was even more striking. WPI inflation recorded a contraction of -0.13% in June, the first decline after 20 straight months of positive growth. A major factor was the sharp drop in food article prices, which fell by 3.75% year-on-year. This compares with a significant 11.1% rise in the same category during June 2024.

Crude petroleum and natural gas prices also played a major role in pulling WPI down. Prices in this segment dropped by 12.3% in June, marking the tenth straight month of decline — with each of the last three months registering double-digit contractions.

These trends suggest that India is entering a period of relatively stable prices, especially in essential categories like food and fuel. While global uncertainties remain, including geopolitical tensions and fluctuating energy markets, the current data offers a hopeful sign: inflation appears to be cooling steadily, and for now, that’s good news for Indian households.

With consistent easing across both retail and wholesale inflation indicators, the broader economic outlook may start to look more optimistic — especially if the trend continues into the second half of the year.