In July, as the food items turned costlier the wholesale price-based inflation declined to 0.58 percent. In June the WPI inflation was at (-) 1.81 percent and May and April it was (-) 3.37 percent and (-) 1.57 percent respectively. The ministry of commerce and industry in a statement said that, based on the monthly WPI (Wholesale Price Index), should at (-0.58 %) for July 2020 while compared to the 1.17 percent during the corresponding month of the previous year. During July inflation in food articles stood at 4.08 percent as against in June it stood at 2.404 percent.
While in July for the fuel and power basket, inflation fell to 9.84 percent compared to the 13.60 percent in the previous month. As against 0.08 percent in June the manufactured products witnessed inflation of 0.51 percent in July. Last week RBI in its policy review kept interest rate unchanged and said it sees upside risk to inflation. From October to March the apex bank expects retail inflation to moderate.
While the retail inflation in July was 6.93 percent as against 6.23 percent in June. In June, due to the sharp rise in vegetable prices the inflation of food articles was at a four-month high level of 4.08 percent. Against (-) 9.21 percent in June, the inflation in vegetables stood at 8.20 percent. In July the pulses saw inflation of 10.24 percent and for the potato, it was 6.09 percent. With inflation at 5.27 percent, the items which are protein-rich such as egg, meat, and fish saw hardening of prices, while inflation of onion fell to 25.56 percent while in fruits it was (-) 3.03 percent. In July the inflation in fuel and power basket fell to 9.84 percent as compared to 13.60 percent drop in the previous month. In July the manufactured products witnessed inflation of 0.51 percent against 0.08 percent in June.
In FY21 we expect WPI to print in a disinflation of 0.8 to 1.0 percent driven by the correction in the prices of various commodities. Aditi Nayar said that today’s WPI print does not materially alter our view that an extended pause is likely from the Monetary Policy Committee.
