NEW DELHI: India’s wholesale prices inflation saw a contraction for the third consecutive month in June, mainly on account of fall in crude oil price. According to government data, WPI index had contracted by by 1.81 per cent during the month compared to a 3.21 per cent contraction in May.
Going by the figures, crude petroleum prices softened by a whopping 41.4 per cent in June. Ten out of the 17 categories of manufactured products listed in the WPI, including textiles, leather, wood, chemical, and basic metals saw a contraction in prices. However, wholesale food inflation picked up marginally during the month to 2 per cent from 1.1 per cent in May as demand and supply both remained constrained. Manufactured items have the highest weight of 64.23 per cent in WPI.
On Monday, the government declared that retail price inflation inched lower to 6.09 per cent, while food inflation eased to a nine- month low at 7.87 per cent. Aditi Nair, principal economist at ICRA Ratings said the divergence between the food inflation at the wholesale and retail level remained substantial in June, hinting at rise in wholesale food inflation.
“With vegetable prices rising sharply in the recent weeks, the uptick in wholesale food inflation may continue in July,” she added. Since retail inflation remains high, most analysts believe the RBI may further cut policy rates in its monetary policy committee (MPC) meeting next month.