Wholesale Inflation Eases To Four-Month Low Of 1.31% In August
The Wholesale Price Index rose 1.31% in August compared to a rise of 2.04% in July.
India's wholesale inflation was the lowest in four months, because of a slower price rise across commodities.
The Wholesale Price Index rose 1.31% in August from an year ago, compared to a rise of 2.04% in July, showed data released by Ministry of Commerce and Industry on Tuesday. On a sequential basis, the index declined by 0.45% from July, led by a decline in the food index.
A Bloomberg poll of economists had forecast wholesale inflation at 1.78% for August.
Fuel and power, core (non-food manufacturing), and crude petroleum and natural gas sub-groups together pulled down the headline WPI print by as much as 70 basis points in the month, vis-à-vis July, said Rahul Agrawal, senior economist at ICRA.
The core WPI inflation dipped to 0.7% in August 2024 from 1.2% in July 2024, amid a continued softening in global commodity prices, according to estimates by ICRA.
WPI Inflation Internals (Year-On-Year)
Inflation in manufactured products—the largest component of the index—rose 1.22%, compared to a rise of 1.58% in July.
Primary-article inflation was 2.42% in August, compared to a rise of 3.08% in the previous month.
Inflation in food articles—a sub-component of primary articles— rose by 3.11% in August, compared to a rise of 3.45% in July.
Vegetable inflation fell by 10.01% in August, after a fall of 8.93% in July.
Inflation in fuel and power fell by 0.67% in August, compared to a rise of 1.72% in July.
While prices of most food items have eased further on a month-on-month basis in September 2024, an adverse base would push up the year-on-year inflation prints for the primary food articles category significantly in the ongoing month, Agrawal said. This would exert upward pressure to the headline WPI inflation print for September 2024.
While kharif sowing has been healthy so far, the surplus rainfall in the ongoing month can potentially delay the kharif harvesting and impact such yields, even as reasonably healthy reservoir storage at a pan-India level is likely to boost the sowing of rabi crops, Agrawal said.
