WPI inflation hits 23-month high

WPI inflation hits 23-month high

Food inflation basket showed double digit inflation of 11.82%

WPI inflation hits 23-month high
Wholesale inflation soared to a 23-month high at 3.55% in July as vegetables, pulses and sugar turned costlier. The wholesale price-based inflation, reflecting the annual rate of price rise, in June stood at 1.62%. In July 2015, WPI inflation was (-)4.00%. The wholesale inflation last witnessed at a higher level than the July 2016 was in August 2014 at 3.74%.

Wholesale price index (WPI) inflation in vegetables shot up by 28.05% in July, while that in pulses rose 35.76%. Potato, a daily consumable vegetable, saw the price rise during the month at 58.78%.

Among others, the rate of inflation in sugar was at 32.33% and that for fruits rose by 17.30% during the month. Overall the food inflation basket showed double digit inflation of 11.82%, according to the Commerce Ministry data. All items, barring onion, in the basket showed a rising price pressure.

WPI inflation, which was in the negative zone from November 2014 to March 2016, has been firming up for the last four months. However, deflationary trend continued in some items like onion at (-)36.29% and petrol at (-)10.30%.

The inflation print for manufactured articles read at 1.83% in July, with the rate of price rise in sugar at 32.33%. The WPI inflation for May has been revised upwards at 1.24%, against provisional estimate of 0.79%.

An elevated wholesale inflation in July follows spike in retail inflation, that too hit a 23-month high of 6.07% well above the RBI’s comfortable level. In its monetary policy last week, the RBI had maintained status quo on key rates citing upside risks to 5% inflation target for March 2017.

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