June WPI Inflation rises to 4.86% from 4.7%

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 June WPI Inflation rises to 4.86% from 4.7%
Wholesale Price Index Inflation for the month of June has come in at 4.86%, as against 4.7% in the previous month. This was largely in line with expectations. 

Food articles inflation rose 3% primarily on the back of a sharp rise in vegetables. Other items in the food articles index that rose were poultry chicken, eggs and maize.

The index for manufactured group rose by 0.1 percent to 149.3 (provisional) from 149.1 (provisional) for the previous month.

Fuel and power which has a weightage of 14.9 per cent in the WPI index rose by 1 per cent. The 10 year bond yield dropped marginally following the inflation data.

Stock markets failed to react to the WPI number, which was largely in line with expectations.


For the month of April, 2013, the final Wholesale Price Index for ‘All Commodities' (Base: 2004-05=100) stood at 171.3 as compared to 171.5 (provisional) and annual rate of inflation based on final index stood at 4.77 percent as compared to 4.89 percent respectively  as reported on 14.05.2013.
Worries for RBI

Today's inflation data was perhaps the most important data point, which the RBI will take into consideration before it unveils its credit policy later on July 30. Today's reading was on expected lines though an increase from the previous month would not go down well with the RBI.

The country's central bank has been facing a predicament in cutting rates, thanks to the high inflation data. On the other hand lower then expected growth numbers in the economy has tied the central bank's hands in cutting rates, due to elevated inflation levels.


Read more about: wpi inflation, rbi
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