Reserve Bank of India Governor Shaktikanta Das stated today that food inflation, with a weight of around 46 per cent in the CPI basket, contributed to more than 75 per cent of headline inflation in May and June. Vegetable prices increased sharply and contributed about 35 per cent to inflation in June.25 High inflation pressures persisted across other major food items also.26 On the other hand, the softening in core inflation continues to be broad-based, with core services inflation touching a new low in the current CPI series during May-June 2024.

Das noted that the high food price momentum is likely to have continued in July. Large favourable base effects may push headline inflation downwards in July. However, he opined that a degree of relief in food inflation is expected from the pick-up in the south-west monsoon and healthy progress in sowing. Buffer stocks of cereals continue to be above the norms. Global food prices showed signs of easing in July, after registering increases since March 2024.

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