India’s WPI Inflation Eases For Second Straight Month

India’s wholesale inflation eased for the second straight month even as prices of manufactured products rose.

Inflation as measured by the Wholesale Price Index stood at 11.16% in July compared with 12.07% in June 2021, according to data released by the Ministry of Commerce and Industry on Monday. The gauge, however, rose 0.6% over the preceding month.

A Bloomberg poll of 22 economists had pegged the wholesale inflation at 11.29%.

Retail inflation, too, fell to its lowest since April, led by lower food prices.

The WPI inflation cooled for the second month in a row, benefitting from a favourable base effect, a softening of food price pressures and the uncertainty related to the Delta plus variant arresting the rise in commodity prices, said Aditi Nayar, chief economist at ICRA.

WPI Inflation Internals

• Inflation in manufactured products — the largest component of the index — rose 11.20% compared with an increase of 10.88% in June.

• Year-on-year, primary articles inflation stood at 5.72 in July compared with 7.74% in June.

• Inflation in prices of food articles remained flat against a 3.09% annual rise in June.

• The index of non-food articles rose 22.94% over the year earlier against an increase of 18.86% in June.

• Fuel and power index rose 26.02% annually in July compared with a rise of 32.83% in June.

In primary articles, prices of onions saw the sharpest rise. Prices of onions jumped 72.01% in the reported month, following a surge of 64.32% in June. Prices of crude petroleum, too, rose 65.51% compared with 62.6% in the previous month.