The FINANCIAL — India’s consumer inflation rate likely edged higher in June as predictions of deficient rainfall pushed up food prices while increases in fuel costs added to pressure, according to Nasdaq.
The consumer-price index likely rose 5.10% from a year earlier in June, according to the median estimate of 10 economists polled by The Wall Street Journal. That compares with May’s 5.01% increase.
“June CPI inflation [would] stay above 5%, underpinned by an increase in prices of vegetables, edible oils and milk in anticipation of a deficient monsoon,” said Radhika Rao, an economist at DBS Bank.
India’s weather department has forecast a 12% shortfall in seasonal rainfall, stoking worries that food prices will rise as dry conditions hurt crops and farm supplies.
Fuel retailers have raised gasoline prices three times since May, driving up fuel costs.
Meanwhile, wholesale prices are expected to decline for the eighth straight month, sliding 2.30% in June, the poll shows. They fell 2.36% in May.
Much of the declines were thanks to a sharp fall in global crude-oil prices since June last year.
However, a recent rebound in oil prices and rising food costs will gradually pull wholesale prices out of the unprecedented deflationary trend, say economists.
“We estimate the WPI inflation at -2.13% in June, led by a sequential increase in the prices of food and non-food articles and fuel components,” said Rupa Rege Nitsure, chief economist at L&T Finance Holdings.
“A slight uptick in output prices, as suggested by the manufacturing PMI, has also been factored in,” she added.
The government will announce the consumer inflation data on July 13 and wholesale data on July 17.
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