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India’s wholesale price index (WPI) inflation eased slightly in June to 15.18% from a three-decade high of 15.88% in the previous month, showed the government data released on Thursday, amid some softening in prices of global commodities including crude and edible oils that are India's key imports. 

June's WPI inflation figure was lower than the forecast of 15.50% in a Reuters poll of analysts, and compared to 12.07% in June 2021. The WPI inflation in June has bucked the three-month rising trend but remained in double-digit for the 15th consecutive month beginning April last year.

Prices of food articles rose 14.39% in June from a year ago, as prices of vegetables, fruits and potato witnessed a sharp spike over the year-ago period. The rate of price rise in vegetables was 56.75%, while in potato and fruits, the price rise was 39.38 and 20.33%, respectively.

Whereas, that of fuel and power prices increased 40.38%. Meanwhile, manufactured goods prices inched up 9.19%. Inflation in crude petroleum and natural gas was 77.29% in June. There was a month-on-month decrease in WPI for manufactured products but primary articles and Fuel & Power saw a marginal rise.

“The high rate of inflation in June, 2022 is primarily due to rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, chemicals & chemical products, food products etc. as compared to the corresponding month of the previous year," stated the government release.

A separate release earlier this week showed that India's retail inflation held above the top end of the the Reserve Bank of India's (RBI) tolerance limit for the sixth straight month in June. Consumer price index (CPI) inflation in June remained little changed at 7.01% from 7.04% in the previous month. India's central bank mainly looks at the retail inflation to frame its monetary policy.

While the moderation in global commodity prices has given some comfort, the threat of a US downturn is the latest risk confronting India amid a weakening rupee. The government and the central bank have taken a raft of measures to cushion the impact of rupee’s fall.

 

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