Increased food prices and costly imports have contributed to a faster rise in inflation in the past month. A rise of 5.79% is the fastest that inflation has jumped in the last 5 months. Costlier diesel equaled higher agricultural prices, adding to the high food prices.
As per government information, the rupee has fallen to a record low, which made imports dearer. The nation's main inflation measure, the wholesale price index, increased 4.86% in June.
Increasing input costs have kept manufacturing prices at a high, leading to the steep drop in domestic demand. Fuel and power are the other major factors that contributed to the inflation. Heavy rainfall and other seasonal issues have also led to a massive rise in inflation.
The RBI seems to have limited options to counter this situation as annual growth continues to fall.
(AW: Sruthi)
