India: Price pressures elevated in June
July 14, 2016
In June, consumer prices increased 1.17% over the previous month, which was above May’s 1.02% rise. The monthly result mainly reflected higher prices for food and beverages as well as pan, tobacco and intoxicants. Inflation rested at May’s 5.8% in June, the highest rate since August 2014. The result matched market analysts’ expectations. Inflation remains above the Central Bank’s target of 5.0% by March 2017, largely due to elevated food price pressures. However, a pick-up in monsoon rains in June and July should contribute to a stabilization in food price inflation going forward.
The wholesale price index (WPI) in June rose 1.45% over the previous month, which followed May’s 1.36% increase. June’s reading continued to reflect rising prices for primary articles as well as for fuel and power products. Wholesale price inflation jumped from May’s 0.8% to 1.6% in June, which marked the highest reading since February 2015. In addition, the trend pointed up and the annual average variation in wholesale prices rose from minus 2.0% in May to minus 1.7% in June.