WPI inflation sees marginal uptick due to rise in prices

  • Data launched by the trade division on Tuesday confirmed meals inflation contracted 1.29% in August whereas gasoline inflation and manufactured merchandise inflation rose to 26.09% and 11.39% respectively throughout the identical month.

By Asit Ranjan Mishra, Livemint, New Delhi

PUBLISHED ON SEP 15, 2021 01:44 AM IST

India’s wholesale value index (WPI)-based inflation accelerated to 11.39% in August after easing for 2 consecutive months, as development in prices of manufactured gadgets gained tempo.

Data launched on Monday confirmed retail inflation eased in August to a four-month low at 5.3% on the again of softening meals prices and a beneficial base impact

Data launched by the trade division on Tuesday confirmed meals inflation contracted 1.29% in August whereas gasoline inflation and manufactured merchandise inflation rose to 26.09% and 11.39% respectively throughout the identical month.

In August, most meals gadgets contracted besides pulses (9.41%) and onion (62.78%). In manufactured merchandise, meals merchandise (12.59%), textiles (17%), chemical compounds (12.11%), fundamental metals (27.51%) drove the general inflation, signalling regaining of pricing powered by producers with the financial system gaining tempo.

Madan Sabnavis, chief economist at Care Ratings, stated passable monsoons, good kharif sowing season and easing of provide facet pressures would soothe inflation over the approaching months to some extent. “Volatile prices in the international markets for crude oil and upward-bound prices of edible oils and metal products would result in higher wholesale inflation given India’s position as a price taker for most of these commodities,” he added.

Gaura Sen Gupta, economist at IDFC First Bank stated elevated core WPI inflation at 11.2% implies that price push pressures are progressively seeping into manufactured items prices. “This is likely to keep core CPI inflation elevated despite presence of excess capacity. Another potential source of upward pressure will be services inflation, which is expected to pick up in Q4FY22, as consumption expenditure rises,” she added.

Data launched on Monday confirmed retail inflation eased in August to a four-month low at 5.3% on the again of softening meals prices and a beneficial base impact, which can allow the central financial institution to hold rates of interest low amid nascent financial recovery. The Reserve Bank of India final month raised the inflation forecast for this fiscal to a median of 5.7%.

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