Wholesale inflation drops to 1.31% in August

WPI inflation in Aug: The Wholesale Price Index (WPI) fell to 1.31 per cent in August, according to the latest government data, marking a notable decrease from 2.04 per cent in July and a sharp drop from the 16-month high of 3.36 per cent recorded in June. This decline in wholesale inflation reflects easing economic pressure and may provide relief to consumers.

August WPI and Economic Impact

The Ministry of Commerce and Industry reported that the WPI inflation in August was driven higher by increased prices of food articles, processed food products, textiles, and machinery. Despite this, the overall WPI inflation saw a month-over-month decrease of 0.45 per cent from July. Continuous drops in wholesale inflation are expected to contribute to economic stability and benefit the common man.

Retail Inflation Trends

Retail inflation in August edged up to 3.65 per cent, aligning with expert predictions of a range between 3.2 per cent and 4 per cent. Food inflation saw a slight increase from 5.42 per cent in July to 5.66 per cent in August. Retail rural inflation also rose marginally from 4.10 per cent in July to 4.16 per cent in August. Consumer food price inflation moderated significantly from 11.51 per cent a year ago and 9.36 per cent in June 2024, dropping to 5.42 per cent in July. However, vegetable prices increased from 6.83 per cent in July to 10.71 per cent in August. Pulses inflation moderated slightly from 14.77 per cent in July to 13.60 per cent in August, while housing inflation remained stable with a slight dip from 2.68 per cent in July to 2.66 per cent in August. Core inflation held steady at 3.4 per cent in August.

Industrial Production and Outlook
In July, the index of industrial production (IIP) stood at 4.8 per cent, exceeding the estimated 4.3 per cent. The slight increase in retail inflation was anticipated due to the softening of vegetable prices, indicating that inflationary pressures may ease in the near future. Overall, the decrease in wholesale inflation combined with stable retail inflation provides a cautiously optimistic outlook for the Indian economy.