India Wholesale Inflation Slows to Over 2-Year Low

Wholesale prices in India rose by 1.08 percent year-on-year in July 2019, slowing from a 2.02 percent gain in the previous month and missing market expectations of 1.93 percent. It was the lowest wholesale inflation rate since June 2017.

Manufacturing inflation, which contributes around 64 percent to the wholesale price index, slowed to 0.34 percent in July from 0.94 percent in June, as prices increased at a softer rate for chemical & chemical products (0.42 percent vs 1.45 percent), textiles (1.36 percent vs 2.67 percent), and wood and products of wood and cork (1.36 percent vs 1.43 percent). In addition, prices fell for both rubber and plastics (-0.27 percent vs 0.18 percent) and basic metals (-4.28 percent vs -3.72 percent).

Prices of primary articles advanced 5.03 percent, compared to 6.72 percent a month earlier, as cost of food articles rose less (6.15 percent vs 6.98 percent in June), in particular vegetables (10.67 percent vs 24.76 percent), pulses (20.08 percent vs 23.06 percent) and milk (0.28 percent vs 0.91 percent). On the other hand, there were declines in sugar cost (-0.94 percent vs 4.01 percent) and potato prices (-23.63 percent vs -24.27 percent).

Meanwhile, wholesale prices of fuel products, including petrol, diesel and cooking gas, fell further (-3.64 percent vs -2.20 percent).

On a monthly basis, wholesale prices fell by 0.2 percent in July, following a 0.2 percent gain in June.

India Wholesale Inflation Slows to Over 2-Year Low

Office of the Economic Advisor | Rida Husna |
8/14/2019 2:42:39 PM