Wholesale inflation eases to 4-month low

Wholesale inflation in the country stood at 1.31 per cent in August, the lowest level recorded in four months, according to official data released on Tuesday. Gauged by the Wholesale Price Index (WPI) and also known as headline inflation, wholesale inflation is the rate of increase in the wholesale prices of a basket of goods and services. 

The development comes days after separate data showed consumer inflation—or the rate of increase in the prices paid by consumer for a given set of goods and services—worsened to 3.65 per cent in the country last month from 3.03 per cent in July, even as it was the second-lowest reading since June 2023. 

The Reserve Bank of India (RBI) primarily tracks consumer inflation—also known as retail inflation—for formulating its monetary policy. 

In July, wholesale inflation was recorded at 2.04 per cent. 

WPI Food Index—which carries a weightage of 24.38 per cent in the Wholesale Price Index—eased to 3.26 per cent in August from 3.55 per cent the previous month, according to the Ministry of Commerce and Industry. 

The Food Index comprises food articles from the primary group of items and food products from the manufactured products group. 

The Index for Primary Articles declined by 1.37 per cent to 194.9 in August from 197.6 for the month of July.

Here are some highlights from the September 17 data set:

• Prices of minerals: -2.66 per cent
• Crude petroleum and natural gas: -1.84 per cent
• Food articles: -1.83 per cent
• Non-food articles: 1.65 per cent

The government attributed the "positive rate" of inflation in August primarily to an "increase in (the) prices of food articles, processed food products, other manufacturing (items), (the) manufacture of textiles and (the) manufacture of machinery and equipment etc."

The RBI targets to contain consumer inflation within two per cent of four per cent in the medium term.