New Delhi: India’s wholesale price inflation (WPI) rose to 9.87 percent in June, up from 9.68 percent in May, mainly because of higher prices of food items, minerals and other key commodities. The latest data released by the Commerce and Industry Ministry showed that rising input costs continued to keep inflation under pressure.
The government uses 2022-23 as the base year for calculating the Wholesale Price Index.
Major reasons behind rise
The ministry said mineral oils (petroleum products), food articles, basic metals, and chemicals and chemical products were the biggest contributors to the rise in wholesale inflation during June.
The increase in prices comes amid the ongoing conflict in West Asia and the disruption in crude oil supplies due to the effective blockade of the Strait of Hormuz, a key route for India’s oil imports. Higher crude oil prices have also increased transportation and production costs, adding pressure on food prices.
Food and fuel remain costly
Inflation in food articles rose sharply to 5.49 percent in June, compared with 3.60 percent in May.
Inflation in non-food articles stood at 11.07 percent, while minerals recorded 9.45 percent inflation during the month.
Although inflation in the fuel and power category eased to 27.41 percent from 30.33 percent in May, it remained at a very high level, keeping overall wholesale prices elevated.
Meanwhile, inflation in manufactured products remained unchanged at 7.48 percent, indicating that factory-level prices stayed stable compared with the previous month.
Impact on economy
The latest WPI data follows the recent rise in retail inflation, which increased to a 17-month high of 4.38 percent in June from 3.93 percent in May.
The Reserve Bank of India mainly considers retail inflation while deciding interest rates. Last month, the central bank raised its inflation forecast for the current financial year to 5.1 percent from 4.6 percent, citing higher global energy prices and their impact on domestic fuel and production costs.