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India's August WPI inflation quickens to 11.39%

Tuesday,   14-Sep-2021   12:23 PM (IST)

India’s wholesale inflation rate in August snapped a two-month easing trend, driven by costlier manufactured items. Wholesale prices rose 11.39% on year in August, government data showed today. The print outpaced a median forecast of 10.75% annual expansion, according to a Reuters poll of economists. It was also faster than previous month’s 11.16% rise. Data showed yesterday that India’s retail inflation rate in August slowed to a four-month low of 5.30%, within the central bank’s tolerance band for the second month in a row. Wholesale food index rose 3.43% in August, the pace easing from 4.46% expansion in the previous month. Wholesale prices of manufactured products, which has a 64.23% weightage in the WPI, rose 11.39% from a year earlier in August, quickening from an annual 11.20% expansion in July. Wholesale prices of basic metals rose 27.51% in August from 29.09% in the previous month, while that of chemicals and chemical related products rose 12.14% from 11.13% in July. Fuel and power costs rose 26.09% from a year earlier in August, tad faster than a 26.02% annual expansion in July. Crude oil prices, India’s costliest import, fell after four months in August. Brent crude, a global marker for prices, closed 4.4% lower last month and a hit a three-month low of $64.60 a barrel during the month. Wholesale prices of essential food items such as vegetables fell 13.3% in August from the earlier month’s 8.73% annual pace of contraction. Onion prices rose 62.78% in August, compared with a 72.01% jump last month. Wholesale potato prices fell 39.81% in August, the pace quickening from a 36.35% fall in July. Wholesale prices of pulses rose 9.41%, compared with an 8.34% gain in July. Milk prices rose 2.95% in August, versus 1.84% increase in the previous month. The government kept June’s wholesale annual inflation reading unchanged at 12.07% expansion. Today’s data are provisional and can be revised later.