Au­gust WPI in­fla­tion rises to 4-month high of 3.24%

Millennium Post - - BUSINESS -

NEW DELHI: Whole­sale in­fla­tion rose to a four-month high of 3.24 per cent in Au­gust as prices of food ar­ti­cles, led by onions and veg­eta­bles, soared.

In­fla­tion based on the whole­sale price in­dex (WPI) was 1.88 per cent in July 2017 and 1.09 per cent in Au­gust 2016. The last such high level of in­fla­tion was wit­nessed in April when the rate of price rise was 3.85 per cent.

The gov­ern­ment data re­leased on Thurs­day showed that prices of food ar­ti­cles went up by 5.75 per cent in Au­gust on a yearly ba­sis, as against 2.15 per cent in July.

Veg­etable prices shot up by 44.91 per cent in Au­gust, as against 21.95 per cent in July.

Onion prices wit­nessed a sharp surge at 88.46 per cent in Au­gust, as against a con­trac­tion of 9.50 per cent in the pre­vi­ous month. In­fla­tion in man­u­fac­tured prod­ucts wit­nessed a slight in­crease at 2.45 per cent in Au­gust, against 2.18 per cent in July.

In fuel and power seg­ment, in­fla­tion saw a sharp surge to a near dou­ble digit in­fla­tion at 9.99 per cent, against 4.37 per cent in July. Fuel in­fla­tion shot up as petrol and diesel prices con­tin­ued to re­main high re­lent­lessly on global crude oil rates, while power tar­iffs shot through the roof on lower do­mes­tic pro­duc­tion.

Apart from veg­eta­bles, the food ar­ti­cles that saw rise in prices in­clude pulses, fruits (7.35 per cent), egg, meat and fish (3.93 per cent), ce­re­als (0.21 per cent) and paddy (2.70 per cent).

How­ever, potato con­tin­ued to see de­fla­tion at 43.82 per cent and pulses (-)30.16 per cent.

The fi­nal print of June WPI in­fla­tion re­mained un­changed from pro­vi­sional es­ti­mate of 0.90 per cent. Data re­leased ear­lier this week showed re­tail in­fla­tion rose to a five-month high of 3.36 per cent in Au­gust due to costlier veg­eta­bles and fruits. Also in­dus­trial pro­duc­tion grew by just 1.2 per cent in July from 4.5 per cent a year ago, bearing the brunt of a dis­mal show of the manufacturing sec­tor.

Last month, the Re­serve Bank cut pol­icy repo rate by 0.25 per cent to 6 per cent cit­ing re­duc­tion in in­fla­tion risk. The rate cut was the first in 10 months and brought pol­icy rates to near 7-year low. The RBI said it will en­deav­our to keep re­tail in­fla­tion close to 4 per cent but in the near term, there might be some uptick on ac­count of pay com­mis­sion pay­outs and price ad­just­ments post GST roll­out from July 1.

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