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WPI Inflation Eases in July but Still in Double Digits at Close to 14%

The let-up in wholesale inflation after five months was due to softening in food prices, says government data.
 WPI Inflation Eases in July but Still in Double Digits at Close to 14%

Image Courtesy: National Herald

New Delhi: The wholesale price-based inflation eased to a five-month low of 13.93% in July on easing prices of food articles and manufactured products.

The WPI-based inflation softened for the second consecutive month in July, raising hopes of further decline in wholesale prices in the months to come.

The Wholesale Price Index-based inflation, after scaling a record high of 15.88% in May, declined to 15.18% in June. It was 13.43% in February.

It was 11.57% in July last year.

The WPI inflation continued its declining trend for the second month in July but remained in double-digits for the 16th consecutive month beginning April last year.

Inflation in food articles in July eased to 10.77% from 14.39% in June.

The rate of price rise in vegetables declined substantially to 18.25% in July against 56.75% in the previous month.

In the fuel and power basket, inflation was 43.75% in July compared with 40.38% in the last month.

Inflation in manufactured products and oil seeds was 8.16% and (-) 4.06%, respectively.

CRCL LLP CEO and Managing Partner DRE Reddy said higher crude oil prices and input costs still weigh on the producers and pass-through has resulted in pushing the retail inflation higher.

"The global economy is recovering as we witness an increase in demand for metals, oils, crude and fertilisers. Moving forward, as the crude prices soften in the summer season and supply issues getting resolved will help ease WPI inflation in the next few months," Reddy added.

The Reserve Bank of India mainly looks at retail inflation to frame monetary policy.

Retail inflation remained above the Reserve Bank's comfort level for the seventh month in a row and was 6.71% in July.

To tame stubbornly high inflation, the RBI has hiked the key interest rate three times this year to 5.40%.

The central bank had projected retail inflation to average 6.7% in 2022-23.

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