WPI inflation falls below 1% in June

WPI inflation falls below 1% in June

WPI inflation falls below 1% in June

After a multi-year low retail price inflation, India's wholesale price inflation eased 0.9% in June, driven by softening food prices.

Government data on Friday showed that prices of potato declined -47.32% year-on-year in June. Prices of onions fell 9.47%, while that of pulses fell 25.47%. Prices of food articles as a whole declined 3.47%.

The prices of non-food articles also declined 5.15%. The inflation numbers were based on new series released last month with 2011-12 as base year, instead of the earlier 2004-05. The manufactured product inflation stood at 2.27%.

The WPI inflation print is at an 11-month low and it comes on the back of an equally low retail price inflation of 1.54% in June.

The lower inflation print along with a slow down in industrial output is expected to put pressure on the Reserve Bank of India to ease policy interest rates in its August policy review.

The factory output growth came down 1.7% in May from 8% in the corresponding period a year ago. The RBI treats consumer price index (CPI)-based inflation as the anchor for its policy decisions.

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