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Inflation | India’s WPI inflation in July eases to 11.16% YoY

Inflation | India’s WPI inflation in July eases to 11.16% YoY

India’s Wholesale Price Index in July 2021 eases to 11.16 per cent YoY as it finally falls below 12 per cent after seeing a record high in May. The high rate of inflation is because of the low base effect and soaring prices of crude oil and manufactured goods.

The index has reduced from last month’s 12.07% but is still high on the back of low base recorded last year. The wholesale price index contracted to 0.25 per cent in the July of 2020.

The softening of the index from the June numbers can be attributed to easing in the inflation index of Fuel and Power that went down from 3.55 per cent in June to 0.53 per cent in July. The other major categories of Manufactured goods and Primary Articles also show reduction in the month-over-month index.

The Consumer Price Index of India eased to 5.59 per cent in July after holding steady above 6 per cent for two consecutive months. Easing of lockdown restrictions helped bring the index down which was falling out of the tolerance band of Reserve Bank of India.

Manufactured Goods have risen from 0.59 per cent last year to 11.20 per cent this July.

The WPI based on food index has also decreased from 6.66 per cent in June to 4.46 per cent in July 2021.

The three constituents of the Fuel and Power category- LPG, Petrol and HSD have all seen a steep rise in inflation as against being in the negative quadrant last year.

From the basket of primary articles, onions have single handedly driven the index way above the July 2020 levels. It now stand at 72.01 per cent from a contraction of 25.56 per cent witnessed last year.

Crude petroleum and natural gas can be ascribed for keeping the index up as their inflation index is at 40.28 per cent from a negative 18.58 from the corresponding month in 2020.

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