Inflation, which is measured by the wholesale price index, marginally dropped to 12.07% in June from 12.94% in May, showed data released by the Ministry of Commerce and Industry on Wednesday. In May 2020, the WPI inflation had contracted 1.81%.

The wholesale inflation eased after six months, reported Bloomberg Quint.

“The high rate of inflation in June 2021 is primarily due to low base effect and rise in prices of mineral oils...petrol, diesel, naphtha, ATF (jet fuel), furnace oil etc, and manufactured products like basic metal, food products, chemical products etc as compared the corresponding month of the previous year,” the Ministry of Commerce and Industry said in a statement.

The month-on-month change in WPI index for June when compared to May was 0.75%.

The fuel and power categories reported a drop of 32.83% in June against 37.61% in May. In manufactured items, which have 64% weightage in the WPI index, the rate of inflation rose to 10.88% in June compared to 10.83% in the previous month.

Retail inflation for the month of June eased slightly to 6.26%, from 6.30% in May, government data showed on Monday.

Inflation in food prices came at 5.15%, marginally higher than 5.01% in May. Prices of cereals and vegetables dropped by 1.94% and 0.70% respectively, in the month of June, as compared to the same month last year.

However, cost of oils and fats rose by 34.78%, while that of fruits and pulses increased by 11.82% and 10.01%.

The surge in inflation will add pressure on the central bank to keep prices under control. In June, the Reserve Bank of India had projected retail inflation at 5.1% for the current fiscal while slashing the growth forecast to 9.5% from 10.5%.

Meanwhile, the country’s factory output for the month of May rose 29.3% from a year earlier, another set of data released by the Ministry of Statistics and Programme Implementation showed on Monday. The sharp rise is a result of the low-base effect due to the countrywide lockdown last year which brought economic activities to a standstill.