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The fall in the prices of cereals, wheat, onion, petrol, electricity and minerals has brought relief on the wholesale inflation front in June 2022. With this, the trend of increasing wholesale price index (WPI) based inflation for the last three months stopped in June. Yet it has remained above 10 per cent for the 15th consecutive month since April 2021.
According to the data released by the government on Thursday, even though there has been a sharp correction in the prices of minerals and basic metals on a monthly basis, the prices of food articles have remained up. Inflation in food articles rose to 14.39 per cent in June, from 12.34 per cent in May 2022.
ICRA Chief Economist Aditi Nair said fears of a slowdown in the global market and softening commodity prices have made minerals and base metals cheaper. Due to this, there has been some relief on the wholesale inflation front. However, WPI inflation continues to remain elevated due to higher prices of fruits, vegetables and potatoes.
Will come down to 13% in July
Nair said commodity and fuel prices are coming down globally. At the domestic level also, the prices of food items are gradually coming down. Its impact will be more visible on the wholesale inflation data for July, 2022 coming next month. It is expected that wholesale inflation will come down to 13 per cent in July.
These products are cheap
Commodities May, 2022 June, 2022
Minerals 33.94 percent 8.55 percent
Cereals 8.01 percent 7.99 percent
Wheat 10.55 percent 10.34 percent
Onion -20.40 percent -31.54 percent
Egg, meat, fish 7.78 percent 7.24 percent
Made clothes 4.79 percent 3.90 percent
Fuel-electricity 40.62 percent 40.38 percent
Petrol 58.78 percent 57.82 percent
Manufactured 10.11 percent 9.19 percent
Food inflation rises
Product May, 2022 June, 2022
Vegetable 56.36 percent 56.75 percent
Potato 24.83 percent 39.38 percent
Fruit 9.98 percent 20.33 percent
Lentils -3.69 percent -2.82 percent
Milk 5.81 percent 6.35 percent
LPG 47.71 percent 53.20 percent
Chemicals 13.94 percent 14.96 percent
Pharmaceuticals 1.83 percent 3.86 percent
Leather and allied goods 1.84 percent 4.08 percent
WPI inflation exceeded 10% for the 15th consecutive month
term rate
April, 2021 10.74%
May, 2021 13.11%
June, 2021 12.07 per cent
July, 2021 11.16 per cent
August, 2021 11.64%
September, 2021 10.66%
October, 2021 13.83%
November, 2021 14.87%
December, 2021 14.27%
January, 2022 13.68%
February, 2022 13.11%
March, 2022 14.55%
April, 2022 15.08 percent
May, 2022 15.88%
June, 2022 15.18 percent
Retail inflation: Will come down to 5 percent by March
The ever-increasing retail inflation may come down by 2 per cent to 5 per cent by March next year. In June 2022, it came down marginally to 7.01 per cent. SBI said in the report that the retail inflation rate in the country has been above 6 percent for the sixth consecutive month. However, in the last two months, the steps taken by the government and the RBI have brought some relief on the inflation front. These steps include reduction in excise duty on petrol and diesel, restrictions on food exports.
According to the report, out of 299, 200 commodities can be classified as supply driven, while 99 can be classified as demand driven. The supply side currently accounts for about two-thirds of the current level of retail inflation, while the demand side contributes one-third. In such a situation, in the coming times, if the supply is right, retail inflation may come down.
SBI said that at present there is only 20 to 30 percent chance of a global recession. The main reason for this is rising inflation and aggressively increasing interest rates. The economy may remain at stagnation for a long time.