WPI inflation falls sharply to 0.90% in June, food prices ease

New Delhi: Wholesale inflation fell to 0.90 percent in June – the lowest in at least eight months – as prices of food articles, including vegetables, declined. Inflation based on the wholesale price index (WPI) was 2.17 percent in May 2017 and (-)0.09 percent in June 2016. The slowdown in wholesale inflation comes against the backdrop of retail inflation easing to a record low of 1.54 percent in June. The WPI figure is at the lowest level in at least eight months – since the availability of data for the new 2011-12 base year series. The government data released today showed that prices of food articles contracted by 3.47 percent in June on a yearly basis. Vegetable inflation stood at (-)21.16 percent. [caption id=“attachment_3813327” align=“alignleft” width=“380”]  Representational image. AFP[/caption] Potato saw a maximum deflation of 47.32 percent, followed by pulses at 25.47 percent. For onion, deflation was 9.47 percent in June. The rate of price increase was 1.93 percent in cereals while that of protein-rich items like egg, meat and fish was 1.92 percent in June. Fuel and power segment saw some cooling of inflation at 5.28 percent, from 11.69 percent in May. Manufactured product inflation read 2.27 percent. Soon after retail inflation hit a record low, Chief Economic Advisor Arvind Subramanian had said there had been a “paradigm shift” in inflation trajectory and that has been “missed by all”. His comments were seen as an apparent reference to the decision of the Monetary Policy Committee, chaired by RBI Governor Urjit Patel, which has kept the key policy rate unchanged so far this year citing pricing pressures. Besides, industrial production data showed that the growth in factory output slumped to 1.7 percent in May, from 8 percent a year ago. WPI inflation is calculated on the basis of 2011-12 as the base year. It was revised in May from 2004-05 with an aim to reflect the macroeconomic picture more accurately. The index basket of the new series has a total of 697 items, including 117 for primary articles, 16 for fuel and power and 564 for manufactured products. The final print of April WPI inflation remained unchanged at 3.85 percent.