Vegetable prices down 24%, onion and potato see steepest declines; manufactured inflation stays steady
Economists see cooling ahead as GST cuts kick in. Manufactured products, which make up nearly two-thirds of the WPI basket, also rose to a four-month high of 2.55% in August
The decline in WPI aligns with the easing of retail inflation, which slipped to an eight-year low of 1.6 percent in July as food inflation slipped further
Wholesale food inflation slipped to a two-year low of -0.26 percent
The data indicates a continued cooling of inflation after the Consumer Price Index (CPI), too, dropped to a near six-year low of 2.82% during the month
Wholesale inflation has been muted throughout the year
Retail inflation declined to a seven-month low of 3.6 percent, with food inflation declining to its lowest level in 21 months
Consumer inflation declined below 5 percent for the first time in five months in January
The trajectory of wholesale prices contrasts with retail inflation, which declined to a four-month low of 5.2 percent in December
The Niti Aayog member Ramesh Chand-led working group will also recommend changes to the price collection mechanism and computational methodology
Consumer inflation declined to 5.5 percent in November compared with a 14-month high of 6.2 percent in the previous month
WPI trajectory follows consumer inflation which rose to a 14-month high of 6.2 percent in October
Within manufactured products, the principal sector that saw its WPI decline substantially month-on-month was basic metals
India’s wholesale inflation declined to 1.31 percent in August compared with 2.04 percent in the previous month
The decline in wholesale price index follows the more significant decline in consumer price index below 4 percent for the first time in nearly five years
Consumer inflation had risen above 5% in June amid rising food prices
Wholesale inflation data comes after the statistics ministry said on June 12 that headline retail inflation fell to a 25-month low of 4.25 percent in May
The WPI, the price of goods before they are sold in the retail market, has dropped considerably from 13.43 percent recorded in February 2022. The metric is also down from 4.73 percent in January.
The latest year-over-year figure was down from 7.3% in November and from a recent peak of 11.7% in March. On a monthly basis, the government said Wednesday that its producer price index, which measures costs before they reach consumers, dropped 0.5% from November to December.
A daily round-up of the most interesting articles to help jump-start the day.
The latest year-over-year figure was down from 8% in October and from a recent peak of 11.7% in March.
While the RBI's policy target is spelt out in terms of the CPI-based inflation, high WPI inflation is seen as a precursor to higher consumer prices as producers pass on rising costs to their customers
An RBI study has found that the long-run relationship between wholesale and retail inflation prints has weakened
The high rate of inflation in November 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum, natural gas, chemical and food products, the government said.