WPI inflation rises for third month, hits 1.62% in June on costlier food

The hardening of the WPI index follows an uptick in retail inflation, announced on Tuesday, which hit a 22-month high of 5.77% in June, dampening chances of a rate cut by RBI at its next policy meet scheduled for August 9.

Accelerating for the third straight month, the wholesale price index-based inflation hit 1.62% in June on costlier food and manufactured items.

The hardening of the WPI index follows an uptick in retail inflation announced on Tuesday. (HT file photo)

The hardening of the WPI follows an uptick in retail inflation, announced on Tuesday, which hit a 22-month high of 5.77% in June, dampening chances of a rate cut by RBI at its next policy meet scheduled for August 9.

Also, the annual rate of wholesale inflation is way higher than 0.79% in May and (-)2.13% in June 2015.

Food inflation rose 8.18% in June due to higher price of fruits, vegetables, cereals as well as protein-rich items, showed government data which were released on Thursday.

There was some source of comfort though as onion prices declined significantly with a reading of (-)28.60% during the month. Besides, fuel and power and minerals showed a price decline at (-)3.62% and (-)20.75%, respectively.

In the manufactured items category, inflation read 1.17%.

“Rate cut by RBI in August is definitely a no. RBI is likely to maintain a status quo for a significant period of time,” said Indranil Pan, chief economist, IDFC Bank.