NEW DELHI: The annual rate of inflation based on the Wholesale Price Index (WPI) in India eased to 2.04% in July 2024, down from 3.36% in June 2024, according to data released by PIIT India. This decline is primarily attributed to a significant drop in the inflation rate for Primary Articles, which fell to 3.08% in July from 8.80% in June.
The WPI, which measures the average change in prices of goods at the wholesale level, reflects the overall cost of production for goods in the economy. The decrease in the inflation rate for Primary Articles, which includes food items, non-food items, and minerals, suggests a reduction in price pressures within these categories. This has likely provided some relief to producers and consumers alike, as the costs of essential commodities have moderated.
However, the data also indicates contrasting trends in other categories. The inflation rate for Fuel & Power, a critical component of the WPI, increased to 1.72% in July from 1.03% in June. This rise suggests that energy costs have continued to climb, likely due to fluctuations in global oil prices or changes in domestic energy policies.
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Similarly, the inflation rate for Manufactured Products, which constitute the largest share of the WPI, rose slightly to 1.58% in July, up from 1.43% in the previous month. This increase indicates ongoing cost pressures within the manufacturing sector, potentially due to higher input costs or supply chain disruptions.
Overall, while the decline in WPI inflation to 2.04% in July reflects easing price pressures in some areas, the increases in Fuel & Power and Manufactured Products suggest that inflationary challenges remain in certain sectors of the economy.