New Delhi: Wholesale price inflation slipped further to (-)2.4 percent in June on cheaper vegetable and fuel prices, continuing the deflationary trend for the eighth month in a row -- prompting the industry to step up its demand for another rate cut by RBI to boost economy.
Also read: Wholesale inflation falls to historic low
Although the prices of various kitchen items eased, pulses and onion turned dearer in June, as per the Wholesale Price Index (WPI) data released by the government today.
Also read: Retail inflation up at 5.01% in May
The inflation was (-)2.36 percent in May, while it stood at 5.66 percent in June 2014.
The wholesale inflation has been in the negative zone since November 2014.
Also read: Adequate food stocks to help contain inflation
This comes a day after the Consumer Price Index (CPI) data showed that retail inflation edged up to eight-month high of 5.4 percent in June.
RBI, which has cut its rates thrice so far this year, mostly tracks the retail inflation for its monetary policy review, but the industry body today said there is a case for rate cut with the wholesale prices showing a continuing deflationary trend.
Also read: Inflation, IIP data to guide market
The recent data showing weakness in manufacturing and services sectors have also added to the clamour for a rate cut by RBI to propel investments and boost the economy.
According to the WPI data, rate of price rise eased for food items, especially wheat, fruits and milk in the wholesale market. Overall wholesale inflation in food category declined to 2.88 percent compared with 3.80 percent in May.
Vegetable prices declined 7.07 percent, with of potato slumping 52.40 percent. Sugar prices too are on decline.
Pulses were dearer by 33.67 percent in June.
Fuel and power inflation was stood at (-)10.3 percent.
Commenting on the data, industry body CII said the near static price line and benign inflation outlook should propel the RBI to continue with its rate easing cycle in its next monetary policy to support investment and consumption demand.
However, it may not be easy for the RBI to take such a call based on WPI data as it primarily factors the consumer price inflation, which inched up in June.
RBI is scheduled to come out with its next bi-monthly monetary policy review on August 4. Earlier, the RBI had said it would watch out for the data, including inflation, and the monsoon progress before any change in its policy rates.
The WPI data further said the manufactured products index inflation was (-)0.77 percent as against (-)0.64 percent last month. Prices eased for cement, non-metallic mineral products and transport equipment and parts.
