June WPI hardens to 1.62% YoY thanks to food prices

Moneycontrol BureauIndia's wholesale price index (WPI) rose 1.62 percent year-on-year in the month of June, compared to 0.79 percent in May, and ahead of economists' expectations of 1.15 percent.The increase was driven by increases in food articles, minerals as well as fuel & power, apart from the base effect.The primary articles index was up 2.9 percent while non-food articles rose 2.1 percent. Minerals group and fuel & power were up 6.9 percent and 3.4 percent respectively."Food and mineral prices have increased globally. We should be seeing further increases in the WPI because of base effect," IDFC Bank Economist Indranil Pan said, adding that his March end WPI forecast is about 4 percent."The other definitive implication was for the currency, which was relatively weaker and therefore, there should have been a relative pickup in core (non-food, non-fuel) inflation because there are a lot of tradeables in the core," he added.However, manufactured products were up 0.2 percent, indicating pricing power of India Inc is yet to recover following one-and-a-half years of deflation that ended a few months back.