India's wholesale food inflation touches 20-month high in June
India's wholesale inflation in June soared to a 16-month high of 3.4%, a significant increase from May's 2.6%, according to government data released today. The data also showed that wholesale food inflation jumped to 8.7% from the previous quarter's figure of 7.4%, reaching a 20-month high This surge in food prices played a crucial role in the overall rise of wholesale inflation, marking the comeback of inflation for manufactured products since February 2023.
Onion inflation shot up to 93.4% in June
Consumer inflation also saw an uptick, surpassing 5% after a four-month hiatus, as reported on July 12. Food inflation specifically escalated from 8.6% to 9.4%, with both vegetable and pulses inflation hitting double digits. Potato inflation rose to 66.4% in June compared with 64.1% in May, while onion inflation shot up to 93.4% from 58.1% in the month of May. Pulses inflation remained high at 21.6% in June.
Central bank expected to maintain policy rate amid inflation
Despite the high inflation and improved industrial production, experts anticipate that the central bank will not modify the policy rate. The policy rate is projected to remain at 6.5% for the ninth consecutive time at its meeting in August. Some experts have even deferred their expectations of a rate cut until December, indicating that an October decision will largely hinge on monsoon progress.
