Inflation in J&K eases to 4.38% in June, still above national average

Srinagar, Jul 14: Retail inflation in Jammu and Kashmir stood at 4.38 percent in June, significantly higher than the national average of 2.1 percent, according to the latest data released by the National Statistical Office (NSO).

While the figure remains elevated, it marks a slight improvement over May, when retail inflation in the Union Territory was recorded at 4.55 per cent—almost double the national average of 2.82 percent—according to the Ministry of Statistics and Programme Implementation.

This modest decline indicates a slight easing in price pressures, but Jammu and Kashmir continues to remain among the states and Union Territories with the highest inflation rates in the country. Kerala reported the highest at 6.71 percent, followed by Goa (5.16 percent), Punjab (4.67 percent), and Jammu and Kashmir (4.38 percent).

At the national level, retail inflation has eased to a six-year low, with the June figure of 2.1 percent marking the lowest year-on-year rise since January 2019. The steady decline in the Consumer Price Index (CPI) since November 2024 is primarily driven by a broad-based drop in food prices, aided by a favourable base effect.

Food inflation in particular turned negative in June, registering at -1.06 percent—the lowest level since 2019—owing to falling prices of vegetables, pulses, cereals, spices, milk, sugar, and meat. Rural inflation stood at 1.72 percent, while urban inflation was slightly higher at 2.56 percent.

However, core inflation—which excludes food and fuel—remained firm, rising to 4.4 percent in June, the highest in nine months. This increase was led by sharp jumps in the prices of gold and silver, with gold inflation touching a 58-month high of 36 percent. The surge is attributed to global market volatility and geopolitical uncertainties, especially in the Middle East.

Wholesale Price Index (WPI)-based inflation also declined sharply, entering negative territory for the first time in 19 months at -0.13 percent in June. The fall was largely driven by a contraction of -3.75 percent in food articles.

While the national trend shows broad disinflation, the persistently higher inflation in Jammu and Kashmir points to regional challenges such as supply chain bottlenecks, limited competition, and higher distribution costs, especially in remote and hilly areas. Although there has been a small reduction in June compared to May, inflation levels in the Union Territory remain a cause of concern, straining household budgets and affecting overall consumer sentiment.

As the Reserve Bank of India considers further monetary policy adjustments, regional disparities in inflation trends are likely to influence policy and development focus in states like Jammu and Kashmir.