Annual urban headline inflation continued its downward trend, registering 27.5% in June 2024, down from 28.1% in May 2024. The decline was influenced by both food and non-food items, as well as a favourable base effect stemming from strong inflationary pressures in 2023.
In June 2024, annual food inflation rose to 31.9%, compared to 31.0% in May 2024. This increase was primarily driven by higher core food prices and the impact of a 300% price hike in subsidized bread announced by the government on 29 May 2024.
However, the rise in food prices was partially offset by a decrease in annual non-food inflation, which stood at 24.5% in June 2024, down from 26.2% in May 2024.
Annual core inflation reached its lowest level since December 2022, decelerating to 26.6% in June 2024 from 27.1% in May 2024. Monthly core inflation also followed this trend, recording 1.3% in June 2024 compared to 1.7% during the corresponding month in 2023.
Monthly urban headline inflation increased by 1.6% in June 2024, rebounding from negative rates in April and May 2024. This rise was driven by core food prices, despite a slight deceleration in monthly non-food inflation.
In rural areas, annual headline inflation stabilized at 26.6% in June 2024. Nationwide, annual headline inflation declined to 27.1% in June 2024, down from 27.4% in May 2024.
Specifically, fresh fruit prices declined by 4.4%, while fresh vegetable prices increased by 1.7%, contributing to monthly headline inflation. Poultry prices rose by 8.3%, while unsubsidized bread prices increased by 8.1%.
Dairy products saw a modest 0.4% increase, while market sugar declined by 1.9% for the second consecutive month.
Regulated items, including medical products and appliances, drove a 3.3% increase in prices in June 2024. Retail items, such as clothing and footwear, contributed 1.8% to monthly headline inflation. Services, including rents and restaurant expenditures, increased by 0.6%.
The monthly core inflation can be attributed to price increases in core food items, with retail items and services also playing a role.
