Rise in inflation to subside on good monsoon: Industry

As inflation based on wholesale prices rose to over 4-year high of 5.77 per cent in June, India Inc today said the spike was temporary as it is caused by disruptions in supply chain, and inflation is expected to be benign on the back of a good monsoon in the near future.

However, according to the industry, rise in the price of essential commodities will curtail chances of a rate cut by the RBI.

"Inflation should not be a worry at this juncture as it is caused by disruptions in supply chain and not due to supply shortages.


"We are hopeful that headline inflation will be under the target of RBI 4% +- 2 per cent in the coming times," PHD Chamber President Anil Khaitan said.

Assocham said wholesale price inflation is expected to fall in coming months as the risks to the Indian economy continue to prevail in the forms of continued uncertainties in the global environment due to rising global protectionism, trade crisis and they could further delay a meaningful recovery of external demand.

The Wholesale Price Index (WPI) based inflation stood at 4.43 per cent in May and 0.90 per cent in June last year.

Inflation in vegetables jumped to 8.12 per cent in June, from 2.51 per cent in the previous month.

The next meeting of the RBI's interest rate fixing panel is from July 30 to August 1.