Wholesale Inflation Eases To 1.08% In July

Wednesday,   14-Aug-2019   12:30 PM (IST)

India’s wholesale price inflation rose 1.08% on year in July, the slowest pace of price gain since June 2017 and easing for a fourth month, driven by faster contraction in fuel and as food prices turned cheaper. The July reading sharply lagged a median forecast for 1.93% annual increase in a Reuters poll of economists and was slower than 2.02% expansion in June. Wholesale food index was at 4.54% in July, slower than a 5.04% expansion in the previous month.  Fuel and power costs fell 3.64% from a year earlier in July, faster than a 2.20% annual decrease in June. Crude oil prices, India’s costliest import, fell in July, with the benchmark Brent crude oil contract losing over 2%. It had fallen to as much as $61.29 a barrel in July, but settled at $65.17 on Jul. 31. India imports over 80% of its crude oil requirements. Wholesale prices of manufactured products, which has a 64.23% weightage in the WPI, rose 0.34% from a year earlier in July, easing from an annual 0.94% expansion in June. Faster rate of contraction in basic metals and slower pace of increase in chemicals and chemical related products costs led to the wholesale price of manufactured items to ease. Wholesale prices of essential food items such as vegetables rose 10.67% in July from the earlier month’s 24.76% annual pace of expansion, while sugar prices decreased 0.94% in July from 4.01% expansion in June. Milk prices rose 0.28%, slowing from 0.91% gain in the previous month. Wholesale potato prices fell 23.63% in July from 24.27% contraction in June. The government revised May’s wholesale annual inflation reading to 2.79% from an initial estimate of 2.45%.