Retail inflation up by 6.09 per cent in June

Food inflation in June increased by 7.87 per cent, according to Consumer Price Index (CPI) data.

 The inflation figures are based on data collected from limited markets in view of the restrictions imposed on account of coronavirus pandemic, the Ministry of Statistics & Programme Implementation said in a release.

 The data collected, however, did not meet the adequacy criteria for generating robust estimates of CPIs at the state-level, it added.

 The retail inflation based on Consumer Prince Index was 3.18 per cent in June 2019.

 The government had released truncated CPI data for April and May in the backdrop of the lockdown to contain COVID-19 pandemic.

 Meanwhile, a foreign brokerage said a longer wait for a vaccine against COVID-19 virus may lead to a contraction of up to 7.5 per cent in the Indian GDP in FY21. Economists at Bank of America Securities also revised down their base case estimates on the real GDP within a week, and now expect it to contract by 4 per cent because of a drop in economic activity. It can be noted that multiple efforts to find a vaccine against the dreaded virus are on both globally as well domestically, but no timelines have been announced yet.

Many analysts are expecting the Indian economy to contract by 5 per cent in FY21 as a result of the nationwide lockdowns, with some also estimating a contraction of up to 7.2 per cent in the GDP.

 “India’s real GDP will likely contract by 7.5 per cent if the global economy has to wait for a vaccine discovery for a year,” the BofA analysts said, calling this as the “bear case”.