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In June 2024, prices for goods at the wholesale level in India went up quite a bit. This was the highest increase in 16 months, driven mainly by higher prices for food and things we make. The Wholesale Price Index (WPI), which measures these price changes, rose sharply to 3.36% from 2.61% in May. Just a year ago, in June 2023, prices were actually decreasing by -4.18%, so this shows a big change.
The Ministry of Commerce and Industry said the prices went up for lots of things, especially food like vegetables and items we produce. Food prices overall went up by 10.87% in June, compared to 9.82% in May. Vegetables, for example, became much more expensive—prices went up by 38.76% in June from 32.42% in May. Onions were a standout, with prices nearly doubling with a 93.35% increase, and potatoes also saw a big jump of 66.37%. Even pulses, like lentils and beans, got more expensive by 21.64%. Other everyday food items like fruits (10.14%), cereals (9.27%), and milk (3.37%) also contributed to the overall increase in prices.
Experts, like Aditi Nayar from ICRA, said the jump in WPI inflation in June was widespread across most sectors, except for fuel and power. They predict that inflation might slow down to around 2% in July 2024, partly because of lower prices in the past that make this year's prices look higher. But they also worry about oil prices, which have been going up and down a lot lately due to supply and demand issues, and this could keep pushing prices up.
In the fuel and power sector, inflation dropped slightly to 1.03% in June, but prices for crude oil and natural gas shot up by 12.55%. Prices for things we make also increased by 1.43% in June, up from 0.78% in May, which added to the overall price rise. This increase in wholesale prices matches what we're seeing in retail prices, which went up to 5.1% in June—also the highest in four months. Retail prices are what we pay when we buy things as consumers, and they're a big deal for the Reserve Bank of India (RBI) when they decide on interest rates and other economic policies.
These rising prices show that there are bigger economic issues at play, like problems with how goods are getting to market, changes in global prices for things like oil, and changes in how much people are buying compared to how much is available. Looking forward, economists and policymakers will be keeping a close eye on how things like global prices and government policies affect prices here.
The RBI, in particular, will watch these trends closely to decide how to manage our economy and keep it stable. In short, while the increase in wholesale prices in June 2024 mostly came from higher food and manufacturing costs, it's part of a bigger challenge for India's economy. How well we handle these challenges will be key to keeping prices in check and making sure our economy stays strong.
