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Wholesale price index (WPI)-based inflation for August came in at 1.08 per cent, much lower than 4.62 per cent recorded in the same month last year. On a sequential basis, WPI remained at the same level recorded in July.
Food articles inflation shot up to 7.67 per cent for the month under review compared to a contraction of 4.04 per cent in the same month. Manufactured products inflation was at nil per cent against 4.43 per cent in August last year.
Read:WPI inflation dips to 1.08% in July with sharp fall in fuel, power prices
Compared to August 2018, consumers had to shell out more for food items such as cereals, paddy, wheat and pulses among others. WPI-based index for onion rose the highest to 33.01 per cent. There was cheaper cooking gas during August 2019 and the index fell by 27.94 per cent.
Aditi Nayar, Vice-President and Principal Economist, ICRA, said the sharper-than-anticipated uptick in food inflation was partly driven by flooding in several parts of the country in August.
“The disinflation in core-WPI in August 2019 has further reinforced our expectation of a rate cut in the October 2019 policy review. In our view, the assessed space for further accommodation should be front loaded. Nevertheless, the efficacy of incremental rate cuts in rapidly instigating a turnaround in economic growth remains uncertain,” Nayar said.
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