Wholesale inflation in June rises to 5.77 per cent on costlier veggies, fuel

Inflation based on Wholesale Price Index (WPI) rose to 5.77 per cent in June from 4.43 per cent in May and 0.90 per cent in June 2017 on increasing prices of vegetables and fuel items, according to the official data released by the government on Monday.

Inflation in vegetables stood at 8.12 per cent in June against 2.51 per cent in the previous month.

Potato inflation was at a peak of 99.02 per cent, against 81.93 per cent in May. Price rise in onion was 18.25 per cent during June, as against 13.20 per cent in the preceding month.

Inflation in ‘fuel and power’ basket too rose sharply to 16.18 per cent in June from 11.22 per cent in May as prices of domestic fuel increased during the month in line with rising global crude oil rates.

Deflation continued in pulses at 20.23 per cent in June.

The WPI inflation for April was revised upwards to 3.62 per cent from the provisional estimate of 3.18 per cent.

Data released last week showed retail inflation scaled a 5-month high of 5 per cent in June on costlier fuel. RBI mainly takes into account retail inflation data while formulating monetary policy.

Rising inflation affirms RBI’s forecast. The apex bank has revised upwards its retail inflation projection for October-March to 4.7 per cent from 4.4 per cent earlier.

In its second monetary policy review for the fiscal, the Reserve Bank last month hiked interest rate by 0.25 per cent—the first hike in more than four years—due to growing concerns about inflation stoked by rising global crude oil prices as well as domestic price increases.

The price of Indian basket of crude surged from USD 66 a barrel in April to around USD 74 currently.

The next meeting of the RBI’s interest rate-fixing panel is from July 30 to August 1.

(With inputs from PTI)