The annual rate of inflation based on the All-India Wholesale Price Index (WPI) fell to 15.18 percent (Provisional) in June 2022, from a three-decade high of 15.88 percent in May.
According to figures released by the commerce ministry on July 14, India’s wholesale price index-based inflation rate reduced to 15.18 percent in June. The tiny decline from the preceding month’s 30-year high of 15.88 percent increases the likelihood that the central bank will raise interest rates again next month.
The 15.88 percent WPI inflation rate in May was the highest in at least three decades. Inflation based on the WPI was 12.07 percent in June 2021. In June, wholesale price inflation surpassed double digits for the 15th straight month, extending the streak to 15 months.
When compared to the same month the year before, June 2022 experienced an exceptionally high rate of inflation. This was largely due to an increase in the prices of mineral oils, food articles, crude petroleum and natural gas, basic metals, chemicals and chemical products, food products, and other similar goods and services.
The all-commodity index of the WPI stayed unchanged in June from its level of 154.0 in May; this suggests that the degree of inflationary pressure may be decreasing. The fact that the all-commodity index has not changed in recent times is an indication that prices are not rising in step with one another.
As manufactured products make up 64.23 percent of the WPI basket, changes in manufacturing inflation often have a substantial impact on total inflation. The other main component included in the WPI basket, fuel and electricity, increased the index by 0.7% month over month.
India reported on Tuesday that annual consumer inflation remained over 7 percent and above the central bank’s tolerance zone for the sixth consecutive month in June, leading to the likelihood of more rate increases next month.
As corporations increasingly pass on high input costs to consumers, an increase in wholesale food and energy prices is expected to affect retail pricing.
