India’s wholesale inflation drops to 2.04% in July

India’s wholesale inflation rate has fallen to 2.04% in July, marking a significant decrease from 3.36% in June. The Wholesale Price Index (WPI) data for July was released by the government on August 14, showing a better-than-expected outcome. The fall in inflation is attributed to changes in the prices of food articles, crude petroleum, and other manufactured products.

Key Highlights

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  • July WPI: 2.04%, down from 3.36% in June.
  • Expected WPI: A CNBC-TV18 poll had predicted the WPI to be around 2.1%.
  • Primary Factors: The reduction in inflation is primarily due to an increase in prices of food products, mineral oils, and crude petroleum.

Understanding WPI

  • What is WPI? The Wholesale Price Index measures the price changes of goods that are traded in bulk and sold to businesses. It is different from the Consumer Price Index (CPI), which tracks the prices of goods and services purchased by consumers.
  • WPI Categories:
    • Primary Articles: Includes food and non-food items.
    • Fuel and Power: Tracks the price changes in fuel-related products.
    • Manufactured Products: Covers a wide range of goods produced and sold in bulk.

July 2024 WPI Breakdown

Commodity Group Price Increase (%)
Food Articles 3.90%
Crude Petroleum & Natural Gas 1.22%
Minerals 1.01%
Non-Food Articles 0.90%
Mineral Oils 1.09%

Sector-Specific Insights

  • Price Increases: Sectors like food products, chemical products, and textiles saw a rise in prices.
  • Price Declines: Basic metals, machinery, and electronic products experienced a drop in prices.

The Ministry of Commerce and Industry, which releases the WPI data, noted that these changes reflect the ongoing fluctuations in the wholesale market, impacting businesses and the economy as a whole.