Wholesale price inflation (WPI) in India stood at 5.77% for the month of June, 2018 as compared to 4.43% for the previous month and 0.90% during the corresponding month of the previous year.

Emkay Global Financial Services, said, ''The pace of WPI inflation has picked up beyond retail inflation partly due to sharper rise in commodity inflation. We expect food inflation to rise in FY19 with significant uptick of nearly 15% in MSP kharif prices, higher procurement by government and likely possibility of farmers to respond with lower supply of food grains due to lower farm realizations in last few years.

There is significant upside risk to WPI inflation emanating from global commodity inflation and INR depreciation. Margins pressure for the manufacturing sector may re-emerge in FY19 till we do not witness any substantial improvement in demand conditions. Also, increasing trade restrictions and tariff hikes can induce inflationary pressure.  We believe, with sharp rise in both CPI and WPI inflation RBI is likely to tighten by 25policy in Aug'18 policy. Overall, we expect more than 50bps hike in FY19.''

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