India’s retail inflation likely rose to 4.2% in June 2026 from 3.9% in May, as the full-month impact of petrol and diesel price hikes along with a pick-up in food inflation driven by perishables, kept prices elevated, according to the median estimate of 18 economists polled by Mint.
Economists expect Consumer Price Index (CPI) inflation to come in between 3.9% and 4.4% in June, with all but one forecasting it at or above the Reserve Bank of India’s (RBI) medium-term target of 4%. If the median estimate is realised, it would mark the first reading above the target under the revised CPI series with 2024 as the base year.
The official data is scheduled to be released on 13 July.
Fuel impact
“The expected increase is less a reflection of broad-based inflationary pressures and more a consequence of a gradual firming in food, fuel and select services categories over recent months,” said Kunal Kundu, economist at Societe Generale.
Four increases in between 16 May and 1 June were in effect throughout June, unlike in May, when the inflation print captured only a partial impact of the hikes. Dhiraj Nim, economist at ANZ Bank, said the pick-up in fuel inflation reflects these domestic fuel price hikes, which have remained in place despite the sharp correction in global crude prices.
The RBI, in the minutes of its , said cumulative increases of 7.4% in petrol and 8.4% in diesel prices since May would have a direct impact of about 36 basis points on headline inflation.
Food risks
Food added to the pressure as well, with food inflation— which accounts for nearly 35% of the CPI basket— likely continuing its upward trend. Going forward, the trajectory remains vulnerable to weather-related risks.
“The uneven temporal as well as spatial progress of monsoon, forecasts of below-normal rainfall during July coupled with strong likelihood of El-Nino occurrence, continue to pose upside risks to the food inflation trajectory,” said economists at Union Bank of India.
So far, economists expect the pickup in inflation to remain largely confined to food and fuel. ANZ Bank’s Nim estimates , which excludes volatile items such as food and fuel, to remain subdued at around 2.5% in June, suggesting broader price pressures are yet to emerge.
Even so, if June inflation comes in at the median estimate of 4.2%, average CPI inflation for the April-June quarter would be 3.9%, below the RBI’s latest projection of 4.2%. The RBI expects inflation to pick up over the rest of FY27, projecting 5.1% in Q2, 5.9% in Q3, and 5.4% in Q4.