August WPI up 0.16%, turning positive for the first time after March

Wholesale price index (WPI) inflation rose to 0.16% in August from a 0.58% contraction in July as inflation for manufactured items advanced to 1.27% from 0.51% from the trailing month, data released by the commerce and industry ministry showed on Monday.

NEW DELHI: India’s wholesale inflation turned positive in August for the first time since March reflecting a recovery in producers’ pricing power.

Wholesale price index (WPI) inflation rose to 0.16% in August from a 0.58% contraction in July as inflation for manufactured items advanced to 1.27% from 0.51% from the trailing month, data released by the commerce and industry ministry showed on Monday.

The ministry of statistics and programme implementation will release the retail inflation data for August later in the day.

WPI was 1.17% in August 2019.

“The WPI for August 2020, have been compiled at a weighted response rate of 76%, while the final figure for June, 2020 is based on the weighted response rate of 88%,” the commerce and industry ministry said in a statement.

Food products, oils, beverages, tobacco, pharmaceuticals, cement, basic metals saw rise in prices from their level a year ago as demand gradually picked up post lifting of the lockdown.

“Looking ahead, the WPI may move in and out of disinflation in the next few months, partly driven by base effects as well as volatility in commodity and food prices. We expect the WPI to record an average disinflation of 0.5% for FY2021,” said Aditi Nayar, principal economist at ICRA.

Manufacture of tobacco products, textiles, wearing apparel, paper and paper products, chemicals, rubber and plastics, other non-metallic mineral products, fabricated metal products except machinery and equipment, computer, electronic and optical products, and furniture saw a decrease in prices in August as compared to July.

“While the prices of manufacture of motor vehicles, trailers and semi-trailers remain unchanged in August, 2020 as compared to July, 2020,” it said.

As per the release, primary articles inflation rose 1.6% in August compared to an increase of 0.63% in July while that in food articles rose 3.84% in August after growing 4.08% last month. Non-food articles inflation contracted 1.46% after shrinking 3.57% in July while fuel and power inflation shrank 9.68% against a fall of 9.84% in July.