Wholesale price inflation jumped in June on account of rising food price
Wholesale prices jumped to 1.62 per cent in June compared to 0.79 per cent increase in the previous month.
The jump in wholesale prices was on account of spurt in food prices.
The prices of vegetables and particularly of potato rose significantly in June leading to higher food prices. Potatoes turned costlier by as much as 64.48 per cent in June. However, price of kitchen staple onion cooled, providing some relief.
Wholesale food prices last month rose 8.18 per cent year-on-year, compared with a provisional 7.88 per cent gain in May.
Retail inflation, which the Reserve Bank tracks to set its interest rate, has also shown an uptick. Retail inflation for June inched up to a 22-month high of 5.77 per cent, according to data released on Tuesday.
June inflation numbers are the last set of inflation data to be released before the Reserve Bank of India meets on August 9 to take the crucial rate decision.
Rising prices is a cause of worry for the RBI which has set an inflation target of 5 per cent by March 2017.
The inflation numbers diminishes the possibility of a rate cut at the Reserves Bank's August meeting which will be Raghuram Rajan's last meet as the RBI governor.