Petrol, diesel prices continue to rise, in turn raising wholesale prices. (Image: Shutterstock)
Wholesale inflation in the country reached 12.07 percent in June, slightly lower than the massive 12.94 percent inflation in May, led by the constant rise in cost of fuel, including petrol, LPG and high speed diesel percolated down into all sectors of the economy.
Measured by the Wholesale Price Index (WPI), wholesale inflation in India reached record level highs for the second consecutive month in May with pace of inflation having accelerated for five straight months.
It had continued to spike every month as it reached a record high in April (10.94 percent). In March, it was 7.89 percent, and 4.83 per cent in February.
While it has been on a continuous uptick from December onwards, when it was just 1.9 percent, the latest figures show how spiraling fuel prices and therefore transport costs, have led to costs spiking economy wide in June.
The month saw fuel inflation shooting up by 32 percent. This was however lower than May’s 37 percent fuel inflation. It was 21 percent in April. According to the WPI, after reducing for 11 straight months, overall fuel prices had risen by just 2 percent in February. But since that it has escalated quickly.
Overall inflation was further pushed up by a 10.8 percent rise in manufacturing prices.
“While the core inflation hardened further to 10.4 percent in June 2021 from 10 percent in May 2021, the pace of the month-on-month uptick in this index eased to a four-month low 0.5 percent. We expect the YoY core inflation to record a further modest uptick in July 2021, before commencing a gradual downtrend from August 2021 onwards,” Aditi Nayar, Chief Economist, ICRA said.