India’s wholesale price inflation has decreased to a four-month low of 1.31% in August, down from 2.04% in July, according to data released by the Ministry of Commerce and Industry on Tuesday. This decline is attributed to falling fuel prices and a decrease in food costs.
The Food Index, which encompasses both ‘food articles’ from the primary articles group and ‘food products’ from the manufactured products group, saw a notable drop from 195.4 (provisional) in July to 193.2 in August. The annual inflation rate based on the WPI Food Index also fell, decreasing from 3.55% in July to 3.26% in August.
The index for primary articles dropped by 1.37%, falling from 197.6 in July to 194.9 in August. Notable price declines were observed in minerals (-2.66%), crude petroleum and natural gas (-1.84%), and food articles (-1.83%). However, prices for non-food articles increased by 1.65%.
The WPI index for fuel and power rose slightly by 0.14%, moving from 147.9 in July to 148.1 in August. Within this category, electricity prices increased by 1.59%, while mineral oils saw a decrease of 0.32%. The price of coal remained unchanged during this period. The index for manufactured products also experienced a minor decline of 0.07%, from 141.7 in July to 141.6 in August.
In contrast, India’s retail inflation stood at 3.65% in August, remaining below the Reserve Bank of India’s target of 4%. The RBI has set a mid-term target of 4% for retail inflation, which is a crucial benchmark before any potential interest rate cuts aimed at stimulating economic growth.
The final Wholesale Price Index and inflation rate for ‘All Commodities’ for June were recorded at 154.0 and 3.43%, respectively. The report indicated that the positive inflation rate in August was primarily driven by increases in the prices of food articles, processed food products, textiles, and machinery and equipment.
