New Delhi: Inflation based on wholesale prices shot up to 5.77% in June on increasing prices of vegetables and fuel items. The Wholesale Price Index (WPI)-based inflation stood at 4.43% in May and 0.90% in June last year.
According to the government data released today, inflation in food articles stood at 1.80% in June 2018, as against 1.60% in the preceding month. Inflation in vegetables jumped to 8.12% in June, from 2.51% in the previous month. Inflation in ‘fuel and power’ basket too rose sharply to 16.18% in June from 11.22% in May as prices of domestic fuel increased during the month in line with rising global crude oil rates.
Potato inflation was at a peak of 99.02%, against 81.93% in May. Price rise in onion was 18.25% during June, as against 13.20% in the preceding month. Deflation continued in pulses at 20.23% in June.
The WPI inflation for April was revised upwards to 3.62% from the provisional estimate of 3.18%.
Data released last week showed retail inflation scaled a 5-month high of 5% in June on costlier fuel. RBI mainly takes into account retail inflation data while formulating monetary policy. Rising inflation affirms RBI’s forecast. The apex bank has revised upwards its retail inflation projection for October-March to 4.7% from 4.4% earlier.
In its second monetary policy review for the fiscal, the Reserve Bank last month hiked interest rate by 0.25% -- the first hike in more than four years -- due to growing concerns about inflation stoked by rising global crude oil prices as well as domestic price increases.
The price of Indian basket of crude surged from USD 66 a barrel in April to around USD 74 currently. The next meeting of the RBI’s interest rate fixing panel is from 30 July to 1 August.