WPI inflation accelerates to 1.6% in June

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Wholesale inflation for June accelerated to 1.6 per cent from 0.8 per cent in May, according to data released by the Ministry of Commerce and Industry.

This comes on the back of retail inflation for the month accelerating marginally to 5.77 per cent.

The rise in the Wholesale Price Index (WPI) was driven largely by inflation in the food articles segment.

“The annual rate of inflation, based on monthly WPI, stood at 1.62 per cent (provisional) for the month of June 2016 (over June 2015) as compared to 0.79 per cent (provisional) for the previous month and -2.13 per cent during the corresponding month of the previous year.”

Inflation in the primary articles segment accelerated to 5.5 per cent in June from 4.55 per cent in May. Within this, the food articles segment saw inflation accelerating to 8.2 per cent in June from 7.9 per cent in May.

“The rise in wholesale price inflation is in line with expectations and is essentially on the back of rising food prices along with some catch up in commodity prices,” said Richa Gupta, Senior Economist, Deloitte. “In particular, vegetable prices have seen a jump of 17.09 per cent during the month, which is in line with seasonal patterns and could possibly take another couple of months to come down.” Fuel prices saw a contraction of 3.6 per cent in June compared to a contraction of 6.1 per cent in May. Inflation in the manufactured goods segment accelerated to 1.2 per cent in June from 0.9 per cent in May. This was mainly driven by a rise in inflation in the manufactured food component, which saw inflation coming in at 8.35 per cent in June from 7.5 per cent in May.