WPI inflation at 12.07% in June as prices soften
NEW DELHI: The wholesale price-based inflation (WPI) eased marginally to 12.07% in June as crude oil and food items witnessed some softening in prices.
Snapping the five straight months of uptick, Wpi-based inflation in June softened even though manufactured products hardened.
However, WPI inflation remained in double-digit for the third consecutive month in June, mainly due to a low base of last year. WPI inflation was at (-) 1.81%, in June 2020.
In May 2021, the inflation was at a record high of 12.94%.
Experts said the continuing double-digit WPI inflation and its potential future spillovers into the retail inflation could inject uneasiness into the tone of monetary policy and noted that WPI is expected to remain at an elevated level till October 2021.
Snapping the five straight months of uptick, Wpi-based inflation in June softened as prices of food articles and crude oil eased, even though manufactured products hardened.
“The annual rate of inflation is 12.07% for the month of June, 2021 (over June, 2020) as compared to (–) 1.81% in June 2020.
“The high rate of inflation in
June 2021, is primarily due to low base effect and rise in prices of mineral oils viz petrol, diesel (HSD), naphtha, ATF, furnace oil etc, and manufactured products like basic metal, food products, chemical products etc, as compared the corresponding month of the previous year,” the Commerce and Industry Ministry said.
Inflation in fuel and power basket eased to 32.83% during June, against 37.61% in May. Inflation in food articles too eased to 3.09% in June, from 4.31% May, even as onion prices spiked.
In manufactured products, inflation stood at 10.88% in June, as against 10.83% in the previous month.
The Reserve Bank of India in its monetary policy last month kept interest rates unchanged at record lows and committed to maintain an accommodative policy stance to support growth.
Retail inflation remained above the RBI’S comfort level of 6% for two straight months at 6.26% in June, data released earlier this week showed.
ICRA chief economist Aditi Nayar said the headline WPI inflation is expected to continue to soften, while remaining in double-digits in the September quarter.
“With the CPI inflation likely to have peaked, we expect policy normalisation to commence in Q4 FY2022, after the growth revival solidifies,” Nayar said.
Industry chamber PHDCCI President Sanjay Aggarwal said significantly high fuel and power inflation is escalating the input costs of the industry and its competitiveness in the domestic and international markets.