India’s wholesale price inflation contracted for the third straight month in June and stood at 1.81%, data released by the Ministry of Commerce and Industry showed on Tuesday. In June last year, wholesale inflation had come in at 2.02%.
The annual wholesale price index fell in June due to sharp decline in fuel prices, though food items remained expensive. The rate of deflation in May and April was 3.21% and 1.57%, respectively. In March, it was 0.42%.
Primary articles inflation fell to 1.21% in June compared to a drop of 2.92% in May. Fuel and power inflation also fell to 13.6%, against 19.83% in the previous month. Food articles inflation rose to 2.04%, as against 1.13% in May. Manufactured products inflation rose to 0.08% in June, against 0.42% fall in May. Non-food articles inflation fell to 2.8% as compared to a decline of 3.53% in May.
The annual retail inflation, the main gauge for the Reserve Bank of India to monitor prices, however, rose to 6.09% in June, data released on Monday showed. It is higher than the central bank’s tolerance level.
Last week, RBI Governor Shaktikanta Das had said the Indian economy has started showing signs of returning to normalcy in response to the staggered easing of lockdown restrictions. However, it is still uncertain what kind of durable effects the pandemic will leave behind on potential growth, Das added.
To boost economic activity, the RBI has cut interest rates by 250 basis points since February 2019.