The spike in food prices at the onset of the monsoon season has corroborated the Reserve Bank of India’s (RBI’s) view that the fight against inflation is far from over, the State of the Economy report of the central bank said.

• At the same time, the report said that the country is poised to become the fastest-growing major economy in the world, notwithstanding some sequential moderation in economic activity in June.
• Consumer Price Index (CPI)-based inflation rate increased to 4.8 per cent in June 2023, from 4.3 per cent in May, primarily on account of an increase in food inflation.
• “Between May and June, CPI recorded a positive momentum of 100 basis points (bps), which was partially offset by a favourable base effect of around 50 bps, resulting in a rise in headline inflation by 50 bps,” the report said.