Wholesale inflation in India, as measured by the Wholesale Price Index (WPI), rose to 3.36 pc (Provisional) in June from 2.61 pc in May, according to official data released by the Commerce Ministry on Monday.
The increase is largely due to higher prices in various categories including food articles, manufacture of food products, crude petroleum & natural gas, mineral oils, and other manufacturing sectors.
The detailed index numbers and inflation rates for ‘All Commodities’ and the major components of WPI for the last three months show that the WPI for all commodities (weight 100 per cent) increased from 152.9 in April (1.19 per cent inflation) to 153.3 in May (2.61 per cent inflation) and further to 153.9 in June (3.36 per cent inflation), read the press release.
For primary articles, with a weight of 22.62 per cent, the index rose from 187.1 in April (5.23 per cent inflation) to 187.7 in May (7.20 per cent inflation) and to 191.6 in June (8.80 per cent inflation).
The fuel and power index, comprising 13.15 per cent of the total, decreased from 151.4 in April (-0.85 per cent inflation) to 150.6 in May (1.35 per cent inflation) and further to 147.7 in June (1.03 per cent inflation).
The index for manufactured products, with the largest weight of 64.23 per cent, increased from 141.2 in April (-0.14 per cent inflation) to 141.7 in May (0.78 per cent inflation) and to 141.9 in June (1.43 per cent inflation).
The food index, with a weight of 24.38 per cent, rose from 184.6 in April (6.09 per cent inflation) to 185.7 in May (7.40 per cent inflation) and to 190.3 in June (8.68 per cent inflation).
The WPI increased by 0.39 per cent in June compared to May. The month-over-month change for the past six months shows that the index was -0.40 per cent in January, 0.00 per cent in February, 0.13 per cent in March, 0.99 per cent in April, 0.26 per cent in May, and 0.39 per cent in June, read the press release.
Examining the major groups, the primary articles index increased by 2.08 per cent in June from May, with food articles up by 2.96 per cent and minerals by 1.47 per cent. Prices of non-food articles and crude petroleum & natural gas declined by 0.32 per cent and 0.57 per cent, respectively.
The fuel and power index fell by 1.93 per cent in June from May, driven by a decrease in electricity prices by 1.67 per cent and mineral oils by 2.38 per cent.
The index for manufactured products saw a modest increase of 0.14 per cent in June from May. Out of 22 NIC two-digit groups, 8 saw price increases, 10 saw price decreases, and 4 saw no change.
Notable increases were seen in food products, chemicals, textiles, rubber & plastics products, and motor vehicles. Decreases were observed in basic metals, non-metallic mineral products, and pharmaceuticals, among others, read the press release.
The food index increased from 185.7 in May to 190.3 in June, with the annual rate of inflation rising from 7.40 per cent to 8.68 per cent.
The WPI for June 2024 was compiled at a weighted response rate of 87.8 per cent, while the final figure for April 2024 had a response rate of 95.8 per cent.
The provisional figures are subject to revision as per the WPI revision policy.
The next release, for July 2024, is scheduled for August 14.
Aditi Nayar, Chief Economist, Head of Research and Outreach at ICRA Ltd. reacted to the recent inflation data, saying, “The jump in the WPI inflation to 3.4 per cent in June 2024 was broad-based, and along expected lines, displaying the third consecutive month of a sizeable sequential step up (+0.3 per cent in March 2024, +1.2 per cent in April 2024 and +2.6 per cent in May 2024). Looking ahead, the headline WPI inflation is expected to dip to ~2.0 per cent in July 2024, driven by a favourable base, as well as some cooling in global commodity prices.”
She further said, “The up move in the WPI inflation in June 2024 was broad-based, driven by all the major segments except fuel and power. After rising to seven-month high levels in May 2024, global commodity prices have seen a continuous dip. The Bloomberg commodity price index has eased by 0.9 per cent sequentially to average at 101.2 during July 1-12, 2024 from 102.2 in June 2024 (-1.6 per cent MoM).”
“Notably, in YoY terms, the index contracted by 3.4 per cent in July 2024 (up to July 12, 2024) as against an expansion seen during the previous two months (+0.6 per cent in June 2024; +2.5 per cent in May 2024). This augurs well for the WPI inflation print in the month”, added Nayar.
