Wholesale price index (WPI) inflation rate fell to a 23-month low at 2.02 per cent in June 2019. WPI inflation rate was at 2.45 per cent in the previous month and the market expectation was 2.35 per cent. This is the second month in a row when the WPI inflation rate has come down. WPI inflation rate reached 5.28 per cent in October 2018, after which it did not reach that level.
It was the lowest wholesale inflation rate since July 2017, amid a slowdown in cost of manufactured products and a marked decline in fuel prices. WPI change rate in manufacturing fell to 0.94 per cent in June, which was 1.28 per cent in the previous month. WPI inflation rate in fuel was -2.2 per cent in June, which was 0.98 per cent in May.
Wholesale Price Index measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses. WPI is unlike the Consumer Price Index (CPI), which tracks the prices of goods and services purchased by consumers. WPI tracks prices at the factory gate before the retail level.
Index for the primary articles group rose by 1.4 per cent and the index for food articles group rose by 1.1 per cent. Among the food articles, prices for marine fish rose by 6 per cent, pork, arhar, barley, peas, and moong rose by 4 per cent each and prices for fruits and vegetables rose by 3 per cent each. The index for non-food articles group rose by 0.7 per cent. Prices of raw rubber rose by 12 per cent, prices of fodder rose by 5 per cent and the prices for groundnut seed rose by 4 per cent.
At 3.18 per cent, retail inflation touched a 8-month high in June. Food prices were the biggest contributor to the price increase, but it remained below the RBI’s medium-term target of 4 per cent.