June CPI Inflation Rises Up To 5%, How It Will Impacts India?

June CPI (Consumer Price Index) may rise up to 5%. The reason behind this is food inflation. The ending of June saw slight increases in vegetable prices which are continuing in July’s beginning also. Thus, many show concerns regarding the increasing inflation rates and food prices. However, the experts do not expect any negative impact on the record-high stock market. The nifty-50 index shows a 5.5% increase in the previous month. Let us have a detailed look at other aspects of increasing June CPI inflation.

Will June CPI Inflation Rise To 5%?

The recent data mentions that the June CPI might rise a little compared to previous months. However, it will not impact the share market much. The investors are also more focused on the upcoming budget and the quarterly company results. India has a stable inflation rate which is less than 6% since September 2023. However, the RBI is trying to bring it to 4%. The food inflation is still a matter of concern. The CPI usually remains around 4.75%. However, it may rise to 5% in June.

Another question arises, where inflation will reach in the coming months? According to the sources, it will remain in the moderate range in the coming months. Food inflation has many causes. Two of the major causes are heat waves and floods. Heatwaves at the beginning of the summer impacted several plantations. It led to the death of the crops due to excessive heat. On the other hand, floods in Assam also damaged the tea crops. The current food inflation is expected to turn moderate by September. The arrival of Kharif crops will help in reducing food inflation.

Food inflation in June is not the central focus of the market. Budget and quarterly results are where everyone has their eyes. The budget and the quarterly results both have the power to impact the share market and other sentiments of the market. However, Several reasons contribute to managing the situation of retail inflation. The investors are also showing their interest in the Indian market. Every week, there is an inflow of Rs. 10 to Rs. 12 lakhs to the capital.

Although the retail inflation of June is not impacting the market inflation on a larger scale, it is still impacting the prices of the vegetables in the Indian market to some extent. In conclusion, the June CPI or retail inflation is expected to rise. However, it will not have a major impact on the stock market. The rise in prices will be manageable. While inflation is expected to come in a moderate state by September 2024.