Wholesale Price Index (WPI) declines to 13.93% in July

According to figures issued by the commerce ministry, Wholesale Price Index (WPI)-based inflation in India decreased to 13.93% in July. The WPI inflation rate dropped from a record-breaking 16.63 percent in May to 15.18 percent in June. Wholesale Price Index (WPI) inflation was 11.57 percent in July 2021. The wholesale price index increased by double digits in July, marking the 16th consecutive month that the WPI has risen above the 10-percent threshold.

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Wholesale Price Index: Key Points

• Food inflation dropped to 9.41 percent in July, down 300 basis points from June, and this contributed to a decrease in the Wholesale Price Index (WPI).
• Among food goods, vegetables experienced a significant monthly price drop of 12.7%. Fruits’ index dropped 3.0 percent, while eggs, meat, and fish’s index dropped 2.6 percent from June.
• Overall, the food index, which makes up 24 percent of the WPI basket, decreased by 2.2 percent in July over the previous month. As a result, the Wholesale Price Index (WPI)‘s entire-commodity index decreased by 0.1 percent from June.
• Reduced pricing of manufactured goods in June also contributed to a decrease in Wholesale Price Index (WPI) inflation.
• Fuel and electricity inflation increased to 43.75 percent, with a 6.6 percent increase from June in the category’s index.

Wholesale Price Index: Analysis from Data

The more closely watched Consumer Price Index (CPI) inflation dropped as predicted to a five-month low of 6.71 percent in July, according to the data of Wholesale Price Index (WPI). The Reserve Bank of India’s plans to raise interest rates are not likely to be significantly affected by the decline in CPI inflation, though. Since the beginning of May, the central bank has increased the repo rate by 140 basis points, and it is widely anticipated that it will do so once more next month as it faces the possibility of not meeting its inflation target. The following meeting of the Monetary Policy Committee is set for September 28–30.

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