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Wholesale Inflation Doubles In July, Surges To Nearly 2-Year High

Wholesale inflation surged to at a faster-than-expected pace in July, gaining 3.55 per cent from a year earlier on higher food prices.
Wholesale Inflation Doubles In July, Surges To Nearly 2-Year High
Wholesale inflation accelerated at a faster-than-expected pace in July, surging to 23-month high of 3.55 per cent on higher food prices. 

Wholesale food prices last month rose 11.82 per cent year-on-year, compared with a 8.18 per cent gain in June. Among individual food items, potato prices surged 59 per cent, vegetables 28 per cent, pulses 36 per cent and sugar 32 per cent.

In June, wholesale inflation had risen 1.62 per cent. 

Madan Sabnavis, chief economist, Care Ratings, said until the new harvest comes in September, the pressure on inflation is unlikely to ease.

The consumer inflation data for July, which was released on Friday, also showed an acceleration, with the reading topping the Reserve Bank of India's (RBI) near-term target.

Consumer prices rose at a faster-than-expected pace to 6.07 per cent last month from a year ago, up from June's 5.77 per cent annual gain. Mr Sabnavis said that the price rise vindicates Reserve Bank's strong stance on inflation. 

Prime Minister Narendra Modi in his Independence Day address to the nation strongly backed the government's fight against inflation.

While PM Modi's government is yet to pick a successor to RBI chief Raghuram Rajan, it has bound the next governor with Dr Rajan's retail inflation target of 4 per cent, with a band of 2 percent on either side, for the next five years. (With Agency Inputs)

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