HomeEconomy NewsJune Wholesale Price Index inflation drops slightly but remains over 15% for third consecutive month

June Wholesale Price Index inflation drops slightly but remains over 15% for third consecutive month

According to the government, the primary reason behind the high rate of inflation in June was the "rise in prices of mineral oils, food articles, crude petroleum and natural gas, basic metals, chemicals and chemical products, food products... as compared to the corresponding month of the previous year".

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By CNBCTV18.com July 14, 2022, 5:52:39 PM IST (Updated)

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June Wholesale Price Index inflation drops slightly but remains over 15% for third consecutive month
The annual rate of inflation based on the Wholesale Price Index (WPI) number has been recorded at 15.18 percent for June 2022. This is the third consecutive month that the reading is over 15 percent and it has stayed in double digits for over a year now.


A CNBC-TV18 poll had suggested the WPI inflation would come at 15.8 percent. The silver lining is that it marginally lower than  15.88 percent recorded in May. In April, the inflation rate was at 15.08 percent.

According to the government, the primary reason behind the high rate of inflation in June was the "rise in prices of mineral oils, food articles, crude petroleum and natural gas, basic metals, chemicals and chemical products, food products... as compared to the corresponding month of the previous year".

The inflation in the food index was recorded 12.41 percent vs 10.89 percent in May. Primary articles inflation was at 19.22 percent, while fuel and power inflation was at 40.38 percent.

Here are other key takeaways for June inflation index on a month-on-month basis




Icra Chief Economist Aditi Nayar said minerals and basic metals displayed a sharp month-on-month correction in June 2022, as fears of an impending global recession unfolded, dampening commodity prices. "We expect the WPI inflation to ease to 13  percent in July 2022, reflecting the ongoing correction in global commodity and fuel prices as well as domestic food prices," Nayar said.

She said that the RBI could hike interest rates by 60 bps over the next two reviews, taking the repo rate to 5.5  percent by September 2022, followed by a pause to ascertain the momentum of economic growth. CRCL LLP CEO and Managing Partner DRE Reddy said the key reason for the high inflation level is rising food, fuel, and vegetable prices. The cut in excise duty announced by the government and good monsoon year may ease inflation a little as we move forward in the year. "The geopolitical tensions and crude price movement and commodity prices will guide WPI inflation going forward," he added.

The RBI mainly looks at retail inflation to frame monetary policy. The next meeting of the RBI's interest-setting monetary policy committee is on August 2-4. Retail inflation remained above the Reserve Bank's comfort level for the sixth month in a row and was at 7.01  percent in June. The RBI projected inflation to be at 7.5  percent in the June quarter (Q1) and 7.4  percent in the September quarter (Q2), before easing to 6.2  percent in the December quarter (Q3) and further to 5.8  percent in the March quarter (Q4) this fiscal.

To tame stubbornly high inflation, the RBI has hiked the key interest rate by 90 basis points in the last two months. The central bank also raised the inflation projection by 100 basis points to 6.7  percent for 2022-23.

(With PTI inputs)
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