Rising fuel prices pushed country's retail inflation to a five month high at 5 percent in June from May's 4.87 percent, data released by Central statistics office (CSO) showed on Thursday.
Fuel inflation grew at 7.14 percent in June from 5.80 percent in May. Transportation and communication costs grew 6.18 percent in June from 5.31 percent a month ago, mainly due to higher petrol, diesel prices.
Retail inflation, measured by Consumer Price Index (CPI), had fallen to 1.46 percent in June 2017.
CPI is the main price gauge that the Reserve Bank of India (RBI) tracks. June's data is an indication that inflation is inching towards the apex bank's upper tolerance level of 6 percent.
Consumer food price inflation growth slowed to 2.91 percent in June from 3.10 percent in May, but still increased from (-) 2.12 percent in June 2017.
Consumer food price inflation is a metric to gauge changes in monthly kitchen costs.
In a separate release, data showed that India's industrial production grew 3.2 percent in May as compared with 4.9 percent jump in April.
In view of the rise in inflation, the Monetary Policy Committee raised the RBI's benchmark repo rate by 25 basis points to 6.25 percent. The Monetary Policy Committee will be meeting later this month to review interest rate regime.
The apex bank also said that the pick-up in the momentum of inflation, excluding food, fuel and HRA has imparted persistence into higher CPI projections for 2018-19.
Fuel inflation grew at 7.14 percent in June from 5.80 percent in May. Prices of vegetables grew 7.8 percent in June, as compared with 8.04 percent in April, while fruits' prices rose 10.13 percent in June from 12.33 percent a month ago.
Pulses continued to witness deflation and contracted (-) 10.87 percent in June from (-) 11.57 percent a month ago. Similarly, sugar prices fell (-) 7.11 percent in June from (-) 8.12 percent in May as price of the sweetener crashed across states, owing to a surge in domestic production due to a bumper harvest.
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