The Wholesale Price Index (WPI) eased marginally to 12.07% in June from last month's record high of 12.94% as prices of food articles and crude oil eased, even though manufactured products hardened, government data showed on Wednesday.
"The annual rate of inflation is 12.07 per cent for the month of June 2021 (over June 2020) as compared to - 1.81 per cent in June 2020," the Commerce and Industry Ministry said. Although the index has softened from the previous month's record spike, it is still on the higher side owing to a low base recorded last year.
"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 to the corresponding month of the previous year," the ministry added.
The WPI inflation remained in double digits for the third consecutive month in June, mainly due to a low base of last year. It was (-) 1.81 per cent in June 2020. Inflation in fuel and power basket eased to 32.83 per cent during June, against 37.61 per cent in May.
Inflation in food articles too eased to 3.09 per cent in June, from 4.31 per cent in May, even as onion prices spiked. In manufactured products, inflation stood at 10.88 per cent in June, against 10.83 per cent in the previous month.
The finance ministry's latest monthly review drew on how a healthy monsoon, gradual rise in Kharif sowing and unlocking of states, is likely to slacken food inflation and in turn the headline inflation.
However, the ministry's review also noted how a global demand-led recovery in the prices of goods, as well as input cost pressures, provide room for risks.
The RBI in its monetary policy last month kept interest rates unchanged at record lows and committed to maintaining an accommodative policy stance to support growth. Retail inflation remained above the RBI's comfort level of 6 per cent for the second straight month at 6.26 per cent in June, data released earlier this week showed.
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