Coconut oil, tomatoes, and umbrellas: What drove inflation in June despite a 6-year low

Inflation still hurt a few items despite the decline

India's retail inflation may have eased to a 77-month low of 2.1 percent in June, but for many consumers, the pinch was still real. A Moneycontrol analysis shows that 40 percent of the items in the consumer price index (CPI) witnessed a faster month-on-month price rise than in May.

Among these, one-third saw prices surge over 1 percent, and nearly 17 percent of the items posted a sequential increase of over 2 percent.

Among the top among contributors was tomatoes, following the historical trajectory, with prices rising 37.8 percent in June, up sharply from 12.7 percent in May.

Coconut oil followed with an 11.3 percent price spike (vs 6.7 percent in May). Other food items like potatoes (5.1 percent)and onions (2 percent) also saw notable hikes.

In the core goods category, gold, silver, and ornaments rose more than 2 percent, and umbrella/raincoat prices increased 1.2 percent—likely driven by the monsoon season.

Despite the price spikes in specific categories, economists remain optimistic.

“The pace of increase in some of these items has been slower than the trend witnessed during previous years,” said Aditi Nayar, Chief Economist at ICRA.

Analysis shows the 37 percent increase in tomato prices in June 2025 was lower than 48 percent in June 2024 and only marginally above the decadal average of 34 percent.

Looking ahead, analysts expect inflation to dip further in July before gradually rising. Given the unexpectedly subdued first quarter, forecasts have been revised downward.

Rajani Sinha, Chief Economist at CareEdge, now expects FY26 inflation to average 3.5 percent, below the RBI’s estimate of 3.7 percent.

India’s Q1 inflation, at 2.7 percent, was already lower than the RBI’s projected 2.9 percent.