WPI inflation remains in negative territory for third straight month in June 

Wholesale Price Index (WPI)-based inflation remained in negative territory for the third consecutive month in June at -4.12% due to the impact of a high base, despite the surge in the prices of vegetables such as tomatoes in recent months.  

“The decline in the rate of inflation in June is primarily due to fall in prices of mineral oils, food products, basic metals, crude petroleum and natural gas and textiles,” said an official release on Friday. 

WPI inflation in May 2023 was at -3.48% and it was -0.79% in April. But it was much higher at 16.23% in June 2022. 

On a month-on-month basis, the WPI index fell 0.4% in June, reflecting weaker price momentum. 

Although the data on WPI inflation is not tracked by the Monetary Policy Committee of the Reserve Bank of India, it signals how retail inflation is likely to behave over the next few months. Consumer Price Index (CPI)-based inflation rose to 4.81% year-on-year in June, up from 4.31% in May. There are concerns that rising vegetable prices could put pressure on inflation in coming months, although it would remain within control due to the high base of last year.  

Wholesale inflation in the food index—which consists of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group—also remained in deflationary territory at -1.24% in June 2023 as against -1.59% in May 2023.   

Wholesale inflation in food articles was in positive territory, but remained low at 1.32% in June as against 1.51% in May. “Prices of food articles (2.10%) increased in June as compared to May, 2023,” said the government statement. Vegetables saw a deflation of 21.98%, compared with a fall of 20.12% in May.  

WPI inflation in primary articles was at -2.87% in June while in fuel and light, it was at -12.63%. Wholesale inflation in manufactured articles was also in negative territory at -2.71%.