Wholesale inflation rate rose to 5.77 per cent in June compared to 4.43 per cent in the previous month, official data showed on Monday.

The Ministry of Commerce and Industry data disclosed that June WPI rate was also higher on year-on-year (YoY) basis. It had risen by 0.90 per cent in June 2017.

The annual rate of inflation, based on monthly WPI, stood at 5.77% (provisional) for the month of June, 2018 (over June, 2017) as compared to 4.43% (provisional) for the previous month and 0.90% during the corresponding month of the previous year, an official release said on Monday.

Build up inflation rate in the financial year so far was 2.49% compared to a build up rate of -0.44% in the corresponding period of the previous year, it added.

The index for Food Articles group rose by 1.1 percent to 141.7 (provisional) from 140.1 (provisional) for the previous month.

The index for Non-Food Articles group rose by 2.9 percent to 122.5 (provisional) from 119.1 (provisional) for the previous month.

The index for manufactured products rose by 0.4 percent to 117.3 (provisional) from 116.8 (provisional) for the previous month.

According to Aditi Nayar, Principal Economist at ICRA: "The lagged transmission of higher crude oil prices, an uptick in cotton prices and electricity tariffs, the hardening of inflation for manufactured products as well as an unfavourable base effect, led to the sharp pickup in the WPI inflation to a 54 month high in June 2018."

"The hardening of the YoY WPI inflation in June 2018 relative to the previous month was pervasive, led by all the major sub-sectors of the WPI."

India Ratings & Research's Director for Public Finance and Principal Economist Sunil Kumar Sinha said: "Even core inflation or inflation in items other than food and fuel has shown a sustained increase over the past three months. Higher core inflation is often interpreted as indication of reduction in output gap in the economy. However, situation appears to be more complex."

"On the one hand industrial growth slowed to a seven-month low in May 2018 and several manufacturing sectors are still saddled with excess capacity and on the other hand core sector inflation at 4.8 per cent is the highest print in the new WPI series."

The rise in WPI rate comes days after the Central Statistics Office (CSO) revealed that retail inflation in India touched the 5 per cent mark in June, compared to 4.87 per cent in May.

As per CSO's data, the average annual rate of inflation as per the consumer price index (CPI) in June last year was 1.46 per cent.