WPI inflation eases to 4-month low of 5.43% in June

Food articles inflation dips to 8.14% from 9.50% last month

The wholesale price index (WPI)-based inflation fell to a four-month low of 5.43% in June against 6.01% in the previous month as the rate of food price rise declined and ironically onions turned cheaper.

However, this may not dissuade RBI from maintaining a status quo on its policy rates next month since sub-normal monsoon threatens drought in some parts of the country. Geo-political crisis in west Asia are also likely to weigh.

The food inflation, having a weight of 14.34%, dipped to 8.14% against 9.50% over the period, official data showed today.

It might look ironical that onion prices are shown as declining when they are rising. Data showed onion prices declining by 10.70% against 2.83% a month ago. This is because inflation is calculated year-on-year and at this point of time onion prices had spiked last year too. In June last year, inflation in onions stood at almost 115%. On that base, prices of onions fell in June this year.

Elsewhere among vegetables, inflation in potatoes rose 42.52% for the month of June against 31.44% in the previous month. Figures for tomatoes are not available.

While prices of cereals rose at a lesser rate in June (5.33%) against May (7.67%), fruit prices rose 21.40% against 19.40%, and milk by 10.82% against 9.57%.

Fuel and power segment saw inflation declining to 9.04% against 10.53%.

On the contrary, manufactured products, which have been witnessing benign inflation, saw a bit higher rate of price rise. Inflation there rose to 3.61% against 3.55% a year ago.