Inflation — measured by the consumer price index — rose by an annual 5% in June, higher than previous month’s 4.9%. Fuel prices increased by 7.1%, while fruit prices shot up by 10.1%. The RBI had flagged inflationary pressures in its last policy review when it raised rates by 25 basis points.
Separate data showed industrial output growth slowed to a seven-month low of 3.2% in May, raising fresh concerns about health of the crucial sector. Capital goods, a key gauge of industrial activity, rose 7.6% during the month compared with a contraction of 1.6% in the year-ago period. Consumer durables grew 4.3% in May compared with 0.6% expansion in May 2017.