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NEW DELHI: India’s wholesale price inflation turned positive in August after a gap of four months, during which it remained in the deflationary territory, signaling producers are slowly regaining their pricing power after the supply and demand shock triggered by the coronavirus pandemic.
Data released by the industry department on Monday showed that wholesale price index-inflation stood at 0.16% in August against a contraction of 0.58% in July as inflation for manufactured items accelerated to 1.27% from 0.51% during the same period. During August, crude oil prices softened 17.44% from a year ago, while fuel prices eased by 9.7% from their levels a year earlier.
Ten out of the 17 categories of manufactured products listed in WPI, including food products, oils, beverages, tobacco, pharmaceuticals, cement, basic metals saw rise in prices from their level a year ago as demand gradually picked up post lifting of the lockdown.
While retail inflation remains elevated above the upper limit of the tolerance level of the Reserve Bank of India, most analysts believe the central bank may continue to keep rates on hold. The monetary policy committee had cut the policy rate cumulatively by 135 basis points between February 2019 and the onset of the pandemic.
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