Inflation for June came in at 10.55%, ahead of consensus estimates. Food articles inflation provided a breather as it reached 14.6%, the first sub-15% since
October, 2009. Non-food manufactured products inflation continued to be on the rise at 7.29%. The outturn for April, in line with March, was revised up to 11.23% from 9.59%
With today’s release, it re-affirms our view that decisive measures have to come in terms of monetary policy to abate the rising inflation. Along with the June numbers, April data were also revised up with the headline inflation rate now at 11.23%, up from 9.59%, a nineteen-month high [The Congress Government is Manipulating Data ?]. Given the recent direction and magnitude of revisions, it will not be surprising to see May numbers too being revised significantly upwards.
Manufactured products inflation came in at 6.66%, up marginally from 6.41% in May. One point of comfort is the sequential deceleration in food products inflation. June print was at 4.31%, down from 19.87% in February 2010. But non-food manufactured inflation continued to give headaches as it climbed up again to 7.29% from 6.58% in May. Textiles price increase was at 14.74%, rubber & plastic at 6.67% and basic metals and alloys was at 12.08%. In general there has not been much change in this component, especially, in terms of deceleration in the price increase. This clearly reiterates the fact that demand-side pressures are still at large and the need for stronger policy action is even more important now.
