Wholesale price-based inflation rate declined to (-) 4.12 per cent for the month of June 2023 as against (-) 3.48 per cent recorded in May 2023, as per a Ministry of Commerce and Industry release. “The decline in the rate of inflation in June 2023 is primarily due to fall in prices of mineral oils, food products, basic metals, crude petroleum & natural gas and textiles,” it said. This is the lowest WPI inflation print since October 2015 when it fell to (-) 4.76 per cent.
The WPI inflation data just days after the Ministry of Statistics and Programme Implementation said that India’s retail inflation for the month of June 2023 increased to 4.81 per cent, for the first time in five months from an upwardly revised 4.31 per cent in May.
The primary articles inflation in June was at (-)2.87 per cent as against (-)1.79 per cent in May. For fuel and power, it stood at (-)12.63 per cent from (-)9.17 per cent in May; and for manufactured products it was at (-)2.71 per cent in comparison to (-)2.97 per cent a month ago. Food inflation in June was at (-)1.24 per cent versus (-)1.59 per cent in May, whereas the food index was higher at 1.39 per cent month-on-month.
Among food items, potato inflation was at (-)21.27 per cent versus (-)18.71 per cent and vegetables inflation came in at (-)21.98 per cent in June. Onion inflation for the last month was at (-)4.31 per cent as against (-)7.25 per cent. However, the eggs, meat and fish inflation for June was at 2.74 per cent as against 2.07 per cent. Pulse and milk inflation too rose to 9.21 per cent and 8.59 per cent respectively.
Manufactured products inflation, meanwhile contracted 2.71 per cent in June as against inflation of (-)2.97 per cent in May. The index for this major group declined by 0.50 per cent to 140.0 (provisional) in June 2023. Out of the 22 NIC two-digit groups for manufactured products, 11 groups have witnessed a decrease in prices while groups have witnessed an increase in prices.
Fuel and power inflation for the month of June was at (-)12.63 per cent in comparison to (-)9.17 per cent in May. The index for this group declined by 1.75 per cent to 146.0 (provisional) in June 2023 from 148.6 (provisional) for the month of May 2023. Prices of coal increased in June as compared to May. Prices of mineral oils (-2.30 per cent) and electricity (-2.96 per cent) declined in June 2023.
Reacting on the same, Dheer Shah, CFO, BDR Pharma, said, “The WPI is on a divergent track as retail inflation is showing signs of a rise due to unseasonal rains and supply bottlenecks for vegetables and perishable items. We expect the retail as well as the wholesale inflation to rise in the remaining monsoon months. Prices at sustainable levels are key to industrial traction. A persistent rise in inflation may lead to rethink by the central bank on their policy status quo.”
