Inflation continues to soar despite ‘cheaper’ food

India's wholesale price index (WPI) rose 9.44 per cent in June on an annual basis, according to data released by the commerce and industry ministry today. The inflation was largely driven by higher prices of manufactured goods and fuel, the government said.

Inflation for April was also revised upwards from the earlier projected 8.66 per cent to 9.74 per cent.

The figures come hard on the heels of statistics released by the ministry last week showing that food inflation dipped to a seven-month low for the week ended 25 June, with the figure in the primary articles index dropping to 7.8 per cent. However the WPI is more closely watched than the consumer price index (CPI), as it covers a higher number of products.

The data showed that the manufactured products index, the largest constituent of the wholesale price index and the barometer that indicates price behaviour, inched up 0.1 per cent, while the primary articles index rose by 2.8 per cent.

The index of food articles too rose by 8.38 per cent in June, while that for fuels rose by 12.85 per cent.

The Reserve Bank of India is expected to ignore the falling industrial production and industry protests to raise rates for the eleventh time since March 2010 at its monetary policy review on 26 July as inflation continues to batter the economy.