WPI inflation seen at 5-month high of -0.6% in August
Informist, Tuesday, Sep 12, 2023
By Shubham Rana
NEW DELHI – India's annual inflation rate, based on the Wholesale Price Index, is likely to rise to a five-month high in August but remain in deflationary zone for the fifth consecutive month, according to a poll by Informist.
According to the median of the estimates of 13 economists in the poll, WPI inflation in August is seen at (-)0.6%, up from (-)1.36% in July. In August last year, WPI inflation was 12.48%.
The commerce and industry ministry is scheduled to release WPI inflation data for August at 1200 IST on Thursday.
At (-)0.6%, the overall index will rise 0.3% on month because of an increase in food prices. Data from the Department of Consumer Affairs showed that wholesale prices of onion jumped 14.0% month-on-month in August, while prices of potato were up 3.6% on month. Prices of tomato, which skyrocketed 264.4% month-on-month in July, fell 6.2% in August.
Wholesale prices of other food items also rose in August. Prices of pulses increased 0.1-3.1% month-on-month, while those of cereals rose 1.2-2.3%.
However, wholesale prices of edible oils declined in August on a sequential basis.
"There has been some correction in domestic food prices that should keep overall wholesale inflation low in August," said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. "The fuel and power group index may see some stress because of rise in crude oil prices, but the stress may be spread out between August and September."
Price of kerosene surged 8.8% month-on-month in August. The price of the Indian crude oil basket rose 7.5% month-on-month to $86.43 per barrel in August.
WPI inflation is currently way below the retail inflation rate, primarily due to softening of non-food commodity prices, which is better captured in the WPI.
Within the WPI, the manufactured products group, which largely comprises non-food commodities, carries 64% weight in the overall index. Manufactured products inflation was (-)2.51% in July.
According to an Informist poll, CPI inflation in August is likely to have moderated slightly to 7.0% from a 15-month high of 7.44% in July. CPI data for August will be released at 1730 IST today.
Following is a summary of details and estimates of respondents for WPI inflation in August:
