WPI inflation hits 2-year high of 3.74% in August as prices of pulses stay high

New Delhi: Wholesale inflation soared to a two-year high of 3.74 percent in August as pulses and manufactured items showed uptick in prices even as vegetable prices witnessed some moderation.

The wholesale price-based inflation, reflecting the annual rate of price rise, in July stood at 3.55 percent. In August 2015, WPI inflation was (-)5.06 percent.



The earlier high in WPI inflation was recorded at 3.74 percent in August 2014.

Wholesale price index (WPI) inflation in vegetables cooled to 0.17 percent in August, from a spike of 28.05 percent in July.

Pulses inflation continued to rule high at 34.55 percent in August, according to the Commerce Ministry data. Potato, a daily consumable vegetable, saw the price rise during the month at 66.72 percent. For onion, it was (-) 64.19 percent.

The rate of inflation in sugar was at 35.36 percent and that for fruits rose by 13.91 percent during the month.

Overall, the food inflation basket showed some moderation with inflation at 8.23 percent in August, against 11.82 percent in July.

WPI inflation, which was in the negative zone from November 2014 to March 2016, has been firming up for the last five months.

However, deflationary trend continued in some items like petrol at (-)8.65 percent and minerals (-)3.44 percent.

The inflation print for manufactured articles read at 2.42 percent in August, up from 1.82 percent in July.

The WPI inflation for June has been revised upwards at 2.12 percent, against provisional estimate of 1.62 percent.

An elevated wholesale inflation in August is in contrast to the retail inflation which eased to a five-month low of 5.05 percent in the month.

The cooling of retail inflation and 2.4 percent contraction of factory output in July has revived hopes for a rate cut by RBI in its next policy meet on 4 October to boost growth.

In its monetary policy review last month, the RBI had maintained status quo on key rates citing upside risks to 5 percent inflation target for March 2017.

Updated Date: Sep 14, 2016 13:44 PM