Wholesale inflation hits 16-month high at 3.36% in June on costlier vegetables
This was the fourth consecutive month when inflation witnessed an upward journey. The wholesale price index (WPI) based inflation was 2.61% in May. It was (-) 4.18% in June 2023.
Wholesale inflation in the country surged to a 16-month high of 3.36% in June on account of the rise in prices of food articles, especially vegetables and manufactured items.
This was the fourth consecutive month when inflation witnessed an upward journey. The wholesale price index (WPI) based inflation was 2.61% in May. It was (-) 4.18% in June 2023.
Wholesale inflation had touched a high of 3.85% in February 2023.
"Positive rate of inflation in June 2024 is primarily due to increase in prices of food articles, manufacture of food products, crude petroleum & natural gas, mineral oils, other manufacturing etc," the Ministry of Commerce and Industry said in a statement on Monday.
As per the data, inflation in food articles rose 10.87% in June, as against 9.82% in May.
Inflation in vegetables was 38.76% during June, up from 32.42% in May. Onion inflation was at 93.35%, while potato was 66.37% in the month under review. Pulses inflation rose 21.64% in June.
During the month, inflation in other food items like fruits stood at 10.14%, cereals at 9.27%, and milk at 3.37%.
The upmove in the WPI inflation in June 2024 was broad-based, driven by all the major segments except fuel and power, ICRA Chief Economist Aditi Nayar said.
Looking ahead, she said, the headline WPI inflation is expected to dip to about 2% in July 2024, driven by a favourable base, as well as some cooling in global commodity prices.
With regard to oil prices, she said, the average price of the Indian basket of crude oil has been quite volatile in July 2024 so far, on the back of supply-demand mismatches, witnessing a month-on-month rise (USD 86.6/bbl up to July 11).
Higher crude oil prices might exert upward pressure on the headline WPI inflation in the ongoing month, she added.
In the fuel and power basket, inflation stood at 1.03%, marginally lower than 1.35% in May.
However, the price rise in crude petroleum & Natural gas was in double digits at 12.55% during the month.
In manufactured products, inflation was at 1.43% in June, higher than 0.78% in May.
The rise in June WPI was in line with the retail inflation data for the month. Retail inflation rose to a four-month high of 5.1% in June, data released last week showed.
The Reserve Bank of India (RBI) mainly takes into account retail inflation while framing the monetary policy.