Wholesale price index-based inflation accelerated for the third straight month in June hitting 1.62 per cent on costlier food and manufactured items. The hardening of the WPI index follows an uptick in retail inflation, announced on Tuesday, which hit a 22-month high of 5.77 per cent 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 per cent in May and (-)2.13 per cent in June 2015.
Food inflation rose 8.18 per cent in June due to higher price of fruits, vegetables, cereals as well as protein-rich items, showed government data which were released today.
The inflation in vegetables remained stubborn, which jumped 16.91 per cent. The print for pulses came in at 26.61 per cent while potatoes turned costlier by as much as 64.48 per cent in June.
There was some source of comfort though as onion prices declined significantly with a reading of (-)28.60 per cent during the month. Besides, fuel and power and minerals showed a price decline at (-)3.62 per cent and (-)20.75 per cent, respectively.
In the manufactured items category, inflation read 1.17 per cent.
“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.