Fuel prices quicken WPI inflation to 11.39% in Aug.

September 15, 2021 12:00 am | Updated 06:01 am IST - NEW DELHI

Manufactured items too turn costlier

Inflation in wholesale prices resurged to 11.39% in August, staying in the double digits for the fifth month in a row.

Inflation in manufactured products escalated for the fourth month in a row to 11.4%, as the second order effects of high fuel prices kicked in.

Fuel and power inflation firmed up to 26.1% in August after a dip in July, even though food price inflation moderated to 3.43% from 4.46% .

“LPG, petrol and diesel witnessed inflation of 48.1%, 61.5% and 50.7% respectively,” said Sunil Kumar Sinha, principal economist at India Ratings and Research.

He stressed that high fuel inflation tends to transmit across sectors as they push up transport, input and wage costs.

Core WPI inflation, which leaves out fuel and food, hit an all-time high of 11.1%, continuing an uninterrupted hardening streak of 15 months, flagged ICRA chief economist Aditi Nayar.

Overall wholesale inflation had moderated to 11.16% in July after hitting a record high of 13.11% in May.

On a month-on-month basis, the Wholesale Price Index (WPI) rose 1.04% in August, after three months of sequential increases around 0.6%.

The wholesale price trends are at a divergence with retail inflation which moderated slightly to 5.3% in August from 5.6% in July.

Besides crude oil, prices of commodities such as edible oil and basic metals, where global prices are directly passed through to users, have also flared up, he said.

“Edible oil inflation has been in excess of 35% since March and basic metals have been above 20% since April,” Mr Sinha said.

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