Wholesalers' inflation hits 11.39% in August

Wholesalers' inflation hits 11.39% in August

Wholesalers' inflation hits 11.39% in August

Rising prices for mainly non-food products caused producer inflation in the wholesale price index (MPI) to rise from 11.16% in July to 11.39% in August. This is in contrast to consumer price inflation (CPI), which fell to a four-month low of 5.3 percent in August. However, it is unlikely that the upward movement in the WPI and the downward movement in the CPI will have any impact on the process of the policy rate review by the Monetary Policy Committee (MPC). The committee will meet next month and is expected to maintain the status quo on key tariffs and take an accommodative stance.

“The high rate of inflation in August is primarily due to rise in prices of non-food articles, mineral oils, crude petroleum & natural gas, manufactured products like basic metals, food products, textiles, chemicals and chemical products etc as compared the corresponding month of the previous year,” a statement from the Office of Economic Adviser, Department for Promotion of Industry and Internal Trade (DPIIT) said on Tuesday.

The three major groups showed an upward trend with WPI inflation for primary products, fuels and energy and finished products of 6.2%, 26.09% and 11.39% respectively. Aditi Nayar, chief economist at ICRA, said WPI's spike in inflation in August was due to major non-food items, minerals and commodities, driven by rising commodity prices and rising commodity prices. oilseed prices.

“The inflation for crude petroleum and natural gas, and fuel and power was largely stable in August at the previous month’s level, whereas both the primary and manufactured food items recorded a softening of inflationary pressures, in line with the moderation in the retail food inflation,” Nayar added.
“The core-WPI inflation has displayed an uninterrupted hardening for 15 consecutive months to a fresh-all time high of 11.1 per cent in August, belying our anticipation that the July print would prove to be the peak. After two soft MoM prints of 0.3 per cent each in June and July, the sequential momentum for core items hardened to 0.7 per cent in August, led by heavyweights such as metals, vehicles, chemicals and electrical equipment,” she said.

Sources:- Hindu business line



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