New Delhi: The significant decrease in wholesale price inflation, reaching a four-month low of 1.31 percent in August, is a positive sign for the Indian economy. The reduction, compared to 2.04 percent in July, was largely driven by a downturn in fuel prices and a decrease in food prices.
The Food Index—consisting of ‘food articles’ from the primary articles group and ‘food product’ from the manufactured products group—decreased from 195.4 (provisional) in July to 193.2 in August.
Stability is evident in the WPI Food Index, with the annual rate of inflation based on it decreasing from 3.55 percent in July to 3.26 percent in August, according to data from the Ministry of Commerce and Industry.
Basic commodity prices saw a welcome reduction, with the Index for Primary Articles declining by 1.37 percent to 194.9 in August from 197.6 in July.
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The prices of minerals (-2.66 percent), crude petroleum and natural gas (-1.84 percent), and food articles (-1.83 percent) decreased in August compared to July. The Price of non-food articles (1.65 percent) went up in August.
The WPI index for fuel and power increased by 0.14 percent to 148.1 in August from 147.9 in July 2024. The price of electricity (1.59 percent) increased, while the price of mineral oils (-0.32 percent) decreased. According to the data, the price of coal witnessed no change in August.
The index for manufactured products declined by 0.07 per cent to 141.6 in August from 141.7 in July.
For June, the final Wholesale Price Index and inflation rate for ‘All Commodities’, which includes all goods and services traded in the wholesale market, stood at 154.0 and 3.43 percent, respectively.
The data, however, attributed the ‘positive rate’ of inflation in August primarily to increases in the prices of food articles, processed food products, other manufacturing, textiles, machinery and equipment etc.
In August, India’s retail inflation was 3.65 percent but remained below the Reserve Bank of India’s (RBI) target of 4 percent. The RBI has fixed a mid-term target of 4 percent for retail inflation before it cuts interest rates to rev up growth.
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–IANS
