New Delhi, July 12: The consumer price index (CPI) inflation rate or retail inflation for the month of June rose to 5 per cent, a data by the Ministry of Statistics and Programme Implementation showed on Friday. The report informed that the CPI for the month of June 2018 was up by 140.6 points from 139.8 points in May 2018. It must be noted that in May, the CPI inflation stood at 4.87 per cent.

According to a Reuters poll, Retail inflation rose to a new year high in June, because of surging oil and food prices, a development that would strengthen calls for more monetary policy tightening by the Reserve Bank of India (RBI). However, the inflation rate came below expectation as a Reuters poll of economists had predicted it to come at 5.30 per cent.

As per details by analysts, the inflation rate was at its highest in almost two years as expected. The Reserve Bank of India (RBI) said in its second bi-monthly Monetary Policy Statement (MPC) that retail inflation, measured by the year-on-year change in the CPI, rose sharply to 4.6 percent in April, driven mainly by a significant increase in inflation excluding food and fuel.

According to the poll, the global oil prices have surged more than 20 per cent this year and nearly 13 per cent in June. This is the major factor behind higher inflation in recent few months as it is India's costliest import. “A recent increase in government-mandated prices is currently predicted to add Rs 15,000 crore to the government's costs, raising concerns over inflation remaining elevated over the coming months”, the Reuter poll informed.

(The above story first appeared on LatestLY on Jul 12, 2018 06:06 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).