Informist, Friday, Sep 13, 2024

By Shubham Rana

NEW DELHI – India’s WPI inflation likely eased to a four-month low of 1.8% in August because of lower food prices, according to an Informist poll of 12 economists.

The wholesale price inflation was 2.04% in July and (-)0.46% in August last year. The Ministry of Commerce and Industry is scheduled to release WPI inflation data for August at 1200 IST on Tuesday.

At 1.8%, the WPI index for all commodities will be flat in August from a month ago. Historically, the index has risen 0.3% month-on-month in August. The overall index is expected to remain flat from a month ago in August, mainly because of a fall in food prices, particularly vegetables, economists said.

According to data from the Department of Consumer Affairs, wholesale prices of tomato declined 23.6% on month in August, while prices of onion and potato rose much lower than the previous month. Wholesale prices of wheat and rice also declined on month in August.

According to CPI data released on Thursday, retail prices of vegetables declined 2.5% from a month ago in August.

"Since the CPI food inflation was higher than expected, we will have to keep an eye on WPI food inflation as well to get an idea on the trajectory of CPI food inflation," Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership, said. CPI food inflation rose to 5.66% in August from a 13-month low of 5.42% in July. The weight for food items is higher in CPI at 39.06%, compared with 24.38% in WPI.

Upadhyay also said that imported price pressures are likely to be contained in August because of lower commodity prices globally.

WPI inflation remains well below CPI inflation, which was 3.65% in August.

The following is a summary of the poll by Informist on WPI inflation in August:

Range of expectations: 1.1-2.5%

Mean: 1.8%

Median: 1.8%

Mode: 1.8%

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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