WPI inflation eases marginally to 12.07% in June

Snapping five straight months of uptick, the wholesale price-based inflation fell marginally to 12.07% in June versus 12.94% in May, as crude oil and food prices eased a litte. WPI inflation was (-) 1.81% in June 2020.

“The high rate of inflation in June 2021 is primarily due to low base effect and rise in prices of mineral oils viz. petrol, diesel (HSD), naphtha, ATF, furnace oil etc, and manufactured products like basic metal, food products, chemical products etc as compared the corresponding month of the previous year,” the commerce ministry said in a statement.

Inflation in fuel and power basket dropped to 32.83% during June, versus 37.61% in May. In food articles too, the inflation eased to 3.09% in June, from 4.31% May. In manufactured products, inflation was little changed at 10.88% against 10.83% during the period under review.

The Reserve Bank of India (RBI) in its monetary policy last month left the key interest rates unchanged at record lows. The central bank kept monetary policy accommodative to help the Asia’s third largest economy recover from the world’s worst outbreak of the Covid-19 pandemic.

The RBI also lowered its forecast for the country’s economic growth to 9.5% for the current financial year ending March 31, 2022, from the previous estimate of 10.5%.