WPI inflation eases to 0.9% in June as food prices decline

Inflation based on the wholesale price index (WPI) was 2.17 per cent in May 2017 and (-)0.09 per cent in June 2016.

The slowdown in wholesale inflation comes against the backdrop of retail inflation easing to a record low of 1.54 per cent in June.

The WPI figure is at the lowest level in at least eight months -- since the availability of data for the new 2011-12 base year series.

The government data released on Friday showed that prices of food articles contracted by 3.47 per cent in June on a yearly basis. Vegetable inflation stood at (-)21.16 per cent.

Potato saw a maximum deflation of 47.32 per cent, followed by pulses at 25.47 per cent. For onion, deflation was 9.47 per cent in June.

The rate of price increase was 1.93 per cent in cereals while that of protein-rich items like egg, meat and fish was 1.92 per cent in June.

Fuel and power segment saw some cooling of inflation at 5.28 per cent, from 11.69 per cent in May. Manufactured product inflation read 2.27 per cent.

Soon after retail inflation hit a record low, Chief Economic Advisor Arvind Subramanian had said there had been a "paradigm shift" in inflation trajectory and that has been "missed by all".

His comments were seen as an apparent reference to the decision of the Monetary Policy Committee, chaired by RBI Governor Urjit Patel, which has kept the key policy rate unchanged so far this year citing pricing pressures.

Besides, industrial production data showed that the growth in factory output slumped to 1.7 per cent in May, from 8 per cent a year ago.

WPI inflation is calculated on the basis of 2011-12 as the base year. It was revised in May from 2004-05 with an aim to reflect the macroeconomic picture more accurately.

India's export grew by 4.39 per cent to $23.56 billion in June as shipments of chemicals, engineering and marine products improved, according to the official data released on Friday.

Import too rose by 19 per cent to $36.52 billion in June from $30.68 billion in the year-ago month due to rise in inward shipments of oil and gold.

A rise in import shot up the country's trade deficit to $12.96 billion in the month under review from $8.11 billion in June 2016, the data released by the Commerce Ministry showed.

Gold import rose to $2.45 billion in June against $1.20 billion in the same month last year.

Oil import was valued at $8.12 billion in the month, an increase of 12.04 per cent over the same in June 2016.

Export in the first quarter of 2017-18 rose by 10.57 per cent to $72.21 billion while import surged 32.78 per cent to $112.2 billion, leaving a trade deficit of $40 billion.

India's services exports in May this year remained nearly flat at $13.46 billion compared to the same month of last year, data from Reserve Bank showed on Friday.

The services exports, or receipts from such services, were of the order of $13.43 billion in May 2016.

However, services imports by India rose by 4 per cent to $7.92 billion during the month under review from $7.62 billion a year ago.

During the first two months (April-May) of the current fiscal, the total receipts from services exports stood at $26.37 billion. It was only slightly up from $26.33 billion in the corresponding year-ago period.

On the other hand, payments towards services imports during April-May of 2017-18 was at $15.11 billion against $14.41 billion from a year ago.

The RBI data is complied from India's International Trade in Services.

The central bank publishes the data with a lag of 45 days which is provisional in nature and undergoes revision when the Balance of Payments (BoP) data are released on a quarterly basis.