Inflation: Wholesale inflation hits 16-month high at 3.4% in June | India Business News
[ad_1]
Data released by the commerce and industry ministry on Monday showed inflation, as measured by the wholesale price index, rose an annual 3.4% in June from 2.6% in May. Food inflation hit double digits at 10.9% in June from 9.8% in May.Inflation in vegetables rose 38.8% in June, while pulses rose 21.6%. Potato prices shot up 66.4% and onion surged 93.4%.
Experts expect the Reserve Bank of India (RBI) to delay any interest rate cut for now, given the pressure of food prices on retail inflation.
“Both wholesale and retail price indices are overwhelmingly being driven by food. CPI inflation crossing the 5% mark in June was largely due to elevated food inflation. While industrial costs are rising, the impact of this is not yet fully reflected in core CPI inflation (core CPI inflation rose marginally to 3.1% in June from 3% in May),” Barclays said in a note
“The central bank is likely to remain hawkish over persistently elevated food inflation. While we expect a window for monetary easing to open in Dec 2024, we note a risk of rate cuts being pushed to 2025 if growth remains on a strong footing or if the inflation surge is stronger than expected by the bank,” Barclays said.
Retail inflation rose to a four-month high in June, led by a spurt in prices of food and beverages, delaying any prospects of interest rate cuts for now.
Data released by the National Statistical office (NSO) on Friday showed retail inflation, as measured by the consumer price index, rose an annual 5.1% in June, faster than the 4.8% in May and higher than the 4.9% in June 2023. Rural inflation was higher at 5.7%, while urban was at 4.4%.
“The jump in the WPI inflation to 3.4% in June 2024 was broad-based, and along expected lines, displaying the third consecutive month of a sizeable sequential step up (+0.3% in March 2024, +1.2% in April 2024 and +2.6% in May 2024),” said Aditi Nayar, chief economist at ratings agency ICRA.
We also published the following articles recently
India’s inflation hits four-month high in June, surpassing expectations. Central bank hesitant on interest rate cuts as inflation nears 4% target. Food prices spike, while core inflation rises. Monsoon coverage to alleviate price pressures. Mixed trends seen in housing prices and factory output.
India sees a surge in wholesale inflation to a 16-month high in June, driven by rising food and manufactured item prices. Onion, potato, and vegetable inflation spike. Learn how this increase aligns with retail inflation data and impacts monetary policy decisions by the Reserve Bank of India.
English 
Hindi