Food inflation will moderate soon, rate cut to get delayed: Experts

After the retail inflation data showed that food inflation in June almost doubled year-on-year to 8.3 percent, economic experts are optimistic that food inflation will decrease in the coming months.

The experts stated that a normal monsoon may provide some relief to consumers in the coming months.

“Vegetables inflation, which has now remained in double digits for eight months, is a major worry, as is rigidity in food grains inflation. Although June rains were deficient, it is not a major concern because July and August rains are what matter for kharif. We expect the progress on monsoon and pick-up in sowing to improve agricultural output and cool off food inflation in the coming months,” said Dharmakirti Joshi, Chief Economist at CRISIL.

Government data showed on Friday that retail inflation for all segments of food - cereal and products, meat and fish, egg, milk and products, oils and fats, fruits, vegetables in particular, pulses and products, sugar, spices, prepared snacks, and sweets - rose month-on-month.

The experts also highlighted that the agriculture commodities were the major cause of rise in June inflation and government should invest more in the agriculture to strengthen the sector.