Inflation rises to 4.86 per cent in June

New Delhi: Inflation rose to 4.86 per cent in June, driven mainly by rising prices of food articles, especially vegetables including onion. Inflation based on the Wholesale Price Index (WPI) had stood at 4.70 per cent in May. In June, 2012, it was 7.58 per cent.

As per official data released on Monday, WPI inflation in the food articles category rose to 9.74 per cent, driven mainly by price rise in onion, cereals and rice.

The rate of price rise in food articles, which has a 14.34 per cent share in the WPI basket, was 8.25 per cent in May. Inflation in onion shot up by 114 per cent in June, from 97.40 per cent in the previous month.

Vegetables prices too went up by 16.47 per cent during the month, from 4.85 per cent in May. It was (-)9.05 per cent in April. Inflation in the manufactured items category, however, declined to 2.75 per cent in June from 3.11 per cent in May.

The non-food articles category, which include fibre, oil seeds and minerals, saw a sharp rise in inflation to 7.57 per cent, from 4.88 per cent in May.

Inflation for April was revised downwards to 4.77 per cent from 4.89 per cent as per provisional estimates. The inflation data would be closely watched by the

Reserve Bank while formulating its first-quarter policy scheduled for July 30.

There have been demands for lowering interest rate in the backdrop of declining inflation. While the Reserve Bank has lowered interest rates by 1.30

per cent since January 2012, the banks have cut lending rates by only 0.30 per cent.

The data showed inflation in egg, meat and fish at 12.23 per cent during June as compared to 11.21 per cent in the previous month. Inflation in cereals and rice was high at 17.18 and 19.11 per cent, against 16.01 and 18.48 per cent, respectively, in May.

Potatoes, however, saw decline in rate of price rise to (-)14.22 per cent, from (-)3.44 per cent in May. Pulses too declined sharply to 1.59 per cent during June, from 5.95 per cent in May.

For the fuel and power category, it was lower at 7.12 per cent in June as compared to 7.32 per cent in the previous month. Data released last week showed retail inflation inching up to 9.87 per cent in June, from 9.31 per cent in the previous month, on costlier vegetables and food items.