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14 Sep 2018

WPI inflation drops to 4-month low of 4.53% in August

Inflation based on wholesale prices eased to a four-month low of 4.53% in August on softening of prices of food articles, especially vegetables.

The Wholesale Price Index (WPI) based inflation stood at 5.09% in July and 3.24% in August 2017.

According to the government data released today, food articles registered deflation at 4.04% in August 2018. Last month, deflation in this category was 2.16%.

In context

WPI inflation drops to 4.53% in August

Details of deflation and inflation in vegetables, pulses

Deflation in vegetables was 20.18% in August, as against 14.07% in July. Potato inflation continued to rule high at 71.89% in August, while onion and fruits witnessed deflation of 26.80% and 16.40%, respectively. Deflation continued in pulses at 14.23% in August.

Last lower WPI inflation was seen in April of 3.62%


Last lower WPI inflation was seen in April of 3.62%

A lower WPI inflation than 4.53% was last seen in April at 3.62%.

As per data, the WPI inflation for June was revised downwards to 5.68% from the provisional estimate of 5.77%.

Deflationary trend in food articles offset the double-digit inflation in the 'fuel and power' basket in August.

Inflation in this category was 17.73% as prices of domestic fuel increased during the month.

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Petrol, diesel prices in India continue to see hikes

While LPG inflation was 46.08%, for diesel and petrol it was 19.90% and 16.30%, respectively, during August.

Brent crude oil price is hovering at around $79 a barrel. This, along with a depreciating rupee has increased the oil import bill, thereby making petrol and diesel costlier.

Petrol yesterday climbed to an all-time high of Rs. 81/liter in Delhi, while diesel was at Rs. 73.08.

RBI last month hiked interest rate to 6.5% on inflation


RBI last month hiked interest rate to 6.5% on inflation

Data released earlier this week showed retail inflation eased to a 10-month low of 3.69% in August.

In its third monetary policy review for the fiscal, the RBI last month hiked interest rate by 0.25% to 6.5% on inflationary concerns.

For July-September, RBI pegged CPI-based retail inflation at 4.2%, which it saw firming up to 4.8% in the second half of the current fiscal.

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