Mumbai:India's Wholesale Price Index (WPI) surged to a 16-month high in June, rising by 3.36% compared to the same month last year, driven predominantly by elevated food prices, as per recent government data.
The latest WPI inflation figure for June is higher than May's 2.61% year-on-year increase.
Food prices spiked by 8.68% year-on-year, up from a 7.4% rise seen in May, with vegetable prices soaring by 38.76% compared to a 32.42% increase in the previous month.
In the manufactured products segment, prices saw a noticeable uptick of 1.43% year-on-year, compared to a 0.78% rise in May.
Meanwhile, fuel and power prices moderated slightly, registering a modest increase of 1.03%, down from the 1.35% gain recorded in May.
Sujan Hajra Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers , said, “We were expecting the wholesale inflation to come in stronger for June as one needs to reckon the 3.4% print comes on the back on a deflation of 4.2% in Jun'23."
"It is really the food inflation that we have seen in the CPI too that is being a major driver, with vegetable prices being up significantly. The other side to it is that we are also seeing manufacturing prices inching up and that will be a strain on corporate margins as we highlighted in our note previously. Going ahead, we see better rainfalls and sowing levels bring inflation numbers lower, while the CRB index too coming down a notch will also remain a positive," Hajra added.
Separately, retail inflation also saw an uptick in June, marking its first increase in five months.
This rise was primarily fuelled by a sharp escalation in food prices, according to data released by the government last Friday.
Policymakers continue to grapple with the challenge of stabilising essential food prices, exacerbated by severe weather conditions including intense heatwaves and heavy floods in northern states of India.