 "WPI, WPI Inflation")
This cooldown in factory gate inflation comes days after the high base effect and reduction in food prices pushed the retail inflation rate to a nearly five-year low of 3.54 per cent in July | Photo: Shutterstock
India’s wholesale inflation, as measured by the wholesale price index (WPI), cooled to a three-month low of 2.04 per cent in July from a 16-month high of 3.36 per cent in June, primarily on the back of a sharp reduction in food prices.
The inflation in food prices stood at 3.45 per cent during the month as compared to 10.87 per cent in June.
The data released by the Ministry of Commerce and Industry on Wednesday showed that the prices of other major sub-indices like manufactured products and fuel and power witnessed a slightly higher year-on year (Y -o- Y) inflation print in the month.
Within food articles, pressure on the factory gate prices was majorly eased up on account of contraction in the prices of vegetables (-8.93 per cent) and egg, meat and fish (-1.59 per cent). Meanwhile, there was also a slight deceleration in the prices of onion (88.77 per cent), cereals (8.96 per cent), paddy (10.98 per cent) and pulses (20.27 per cent).
On the other hand, the prices of potato (76.23 per cent) and fruits (15.62 per cent) accelerated during the month.
The manufactured products, which have a weightage of 64.2 per cent in the index, also saw a rise in inflation to 1.58 per cent in July from 1.43 per cent in June. This was led by an acceleration in the prices of manufactured beverages (2.14 per cent), tobacco (2.31 per cent), textiles (2.09 per cent), wood products (3.53 per cent) and pharmaceuticals (2.05 per cent) among others.
The factory gate prices for fuel and power (1.72 per cent) accelerated in July as the prices of cooking gas (6.06 per cent) rose sharply. The prices of high-speed diesel (-1.65 per cent) and petrol (-0.64 per cent) rose, but remained in contraction during the month.
This cool down in factory gate inflation comes days after the high base effect and reduction in food prices pushed retail inflation rate to nearly five-year low of 3.54 per cent in July. Although the Reserve Bank of India (RBI) tracks retail inflation for its monetary policy, the reduction in WPI may help in keeping the retail inflation low, though with a time lag.
First Published: Aug 14 2024 | 1:02 PM IS