CPI Inflation Eased Marginally To 6.26% In June, While Exceeding MPC’s 6% Upper Threshold: ICRA
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ICRA Research Report
The headline Consumer Price Index inflation softened marginally to 6.26% on a year-on-year basis in June 2021 (up 6.2% in June 2020) from the six month high 6.30% in May 2021 (up 6.3% in May 2020).
However, it remained above the upper threshold of the Monetary Policy Committee’s 2-6% medium term target for the second month in a row, and exceeded our projection of 6.1%.
The marginal dip in the YoY CPI inflation in June 2021 relative to May 2021 was driven by a moderation in the inflation for pan, tobacco and intoxicants, and a mild decline in the inflation for housing.
In contrast, the inflation rose between these months in the case of food and beverages, clothing and footwear, and fuel and light, whereas that for miscellaneous items was largely steady.
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