WPI Eases to 5.09 % in July, After a Relaxation from Retail Inflation

WPI Eases to 5.09 % in July, After a Relaxation from Retail Inflation

The annual rate of inflation based on wholesale prices eased to 5.09 percent in July from a rise of 5.77 percent in June, official data showed on Tuesday.

The data on wholesale price index (WPI) furnished by the Ministry of Commerce and Industry showed that the rate of inflation had increased to 1.88 percent during the corresponding month in 2017.

“Build up inflation rate in the financial year so far was 2.92 percent compared to a build-up rate of 0.62 percent in the corresponding period of the previous year,” the ministry said in its review statement.

On a sequential basis, the expenses on primary articles, which constitute 22.62 percent of the WPI’s total weightage, inched up by 1.73 percent, from an increase of 5.30 percent in June 2018.

Prices of food articles dipped. The category has a weightage of 15.26 percent in the WPI index. It deflated by (-) 2.16 percent from a rise of 1.80 percent.

However, the cost of fuel and power category, which commands a 13.15 percent weightage in the index, increased at a faster pace of 18.10 percent from a growth of 16.18 percent.

In addition, expenses on manufactured products registered a rise of 4.26 percent from 4.17 percent.

The wholesale data came a day after the release of July retail inflation data on Monday.

India’s July retail inflation fell to 4.17 percent from 4.92 percent in June, even as it continued to rule over the Reserve Bank of India (RBI)’s medium-term inflation target of 4 percent, official data showed on Monday.

However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in July 2018 was higher than in the corresponding period last year, when retail inflation stood at 2.36 percent.

According to the data furnished by the Central Statistics Office (CSO), the Consumer Food Price Index (CFPI) rose 1.37 percent in July from 2.91 percent in June 2018.

Product-wise, prices of milk-based products, eggs, meat, and fish pushed the retail inflation higher on a YoY basis.

In contrast, deflation in the cost of vegetables, pulses, and sugar capped the overall food prices.

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