INVC NEWS
New Delhi :Despite the Reserve Bank and the Modi government’s efforts to control inflation, the rising prices of food items have driven inflation to unprecedented heights. For the fourth consecutive month, the wholesale inflation rate has surged, reaching 3.36 percent in June 2024, up from 2.61 percent in May.
Inflation Data Analysis: June 2024
According to the Ministry of Commerce and Industry, the inflation based on the Wholesale Price Index (WPI) was 2.61 percent in May. However, by June, this figure had climbed to 3.36 percent. This is a stark contrast to the previous year, where the WPI was 4.18 percent below zero in June, indicating a trend of decreasing inflation.
Key Drivers of Increased Inflation
The ministry’s statement attributed the increase in inflation to several factors. The primary drivers were the rising prices of food items, the manufacturing of food products, raw chemicals and natural gas, mineral oil, and other manufactured goods. These sectors saw significant price hikes, contributing to the overall increase in wholesale inflation.
Food Items and Manufacturing: The Main Culprits
In June, the inflation rate for food items soared to 10.87 percent, up from 9.82 percent in May. Vegetables experienced a dramatic increase in inflation, jumping from 32.42 percent in May to 38.76 percent in June. Onions saw an inflation rate of 93.35 percent, while potatoes reached 66.37 percent. Additionally, pulses witnessed an inflation rate of 21.64 percent in June.
Sector-Specific Inflation Rates
The fuel and power sector experienced a slight decrease in inflation, with the rate dropping from 1.35 percent in May to 1.03 percent in June. In contrast, inflation in manufactured products rose from 0.78 percent in May to 1.43 percent in June.
Retail Inflation Parallels Wholesale Trends
The increase in the wholesale price index aligns with the retail inflation data for June. According to data released last week, retail inflation rose to a four-month high of 5.1 percent in June.
Impact on Economy and Consumers
The persistent rise in wholesale inflation indicates ongoing challenges in stabilizing the economy. Higher wholesale prices can lead to increased retail prices, affecting consumer purchasing power. The government and policymakers need to address these inflationary pressures to prevent further economic strain.
Addressing Inflation Challenges
In conclusion, the significant rise in wholesale inflation over the past months highlights the need for effective measures to control price hikes, particularly in essential commodities like food items. Both the Reserve Bank and the government must implement strategic policies to mitigate inflationary pressures and ensure economic stability.
