Wholesale Inflation Hits 16-Month High

New Delhi: With the increase in prices of food articles, especially vegetables and other food products, crude petroleum & natural gas, and mineral oils among others, the wholesale price surged to a 16-month high of 3.36 per cent in the month of June from 2.61 per cent in May this year. The wholesale inflation has observed an upward move this year, with the figures recorded at 1.26 per cent in April and 0.53 per cent in March, according to the government data released on Monday.

The wholesale price index or WPI-based inflation was (-) 4.18 per cent in June 2023, while it had touched a high of 3.85 per cent 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 & Industry said in a statement.

As per the data, inflation in food articles rose 10.87 per cent in June, as against 9.82 per cent in May. “Inflation in vegetables was 38.76 per cent during June, up from 32.42 per cent in May, while onion inflation was at 93.35 per cent. Besides, potato was 66.37 per cent in the month under review and pulses inflation rose 21.64 per cent in June,” the data showed.

However, experts and economists said that during the month, inflation in other food items like fruits stood at 10.14 per cent, cereals at 9.27 per cent, and milk at 3.37 per cent. “The upward move 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, the headline WPI inflation is expected to dip to about 2 per cent in July 2024, driven by a favourable base, as well as some cooling in global commodity prices. With regard to oil prices, 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 ($86.6/bbl up to July 11),” she said, adding that higher crude oil prices might exert upward pressure to the WPI inflation in the ongoing month.

The data further showed that in the fuel and power basket, inflation stood at 1.03 per cent, marginally lower than 1.35 per cent in May. “However, the price rise in crude petroleum & Natural gas was in double digits at 12.55 per cent during the month. In manufactured products, inflation was at 1.43 per cent in June, higher than 0.78 per cent in May,” the data showed.