Wholesale Price Inflation moderated to a five-month low of 13.93% in July from 15.18% in June, driven by a lower pace of price rise for primary products, food items, and manufactured products, even though fuel and power inflation resurged from 40.38% in June to 43.75% in July.
This is the 16th month in a row that wholesale inflation has been over 10% in India. The Commerce and Industry Ministry also revised May’s inflation rate upward to a fresh high of 16.63% from the earlier estimated record inflation rate of 15.88%.
Despite the paring of the headline inflation rate, the Wholesale Price Index (WPI) dropped only 0.13% on a month-on-month basis between June and July, as fuel and power inflation jumped 6.56% sequentially, offsetting the moderation in other categories.
Within fuel and power, diesel inflation soared back up to hit 72.4%, from a four-month low of 54.9% in June. Petrol inflation moderated marginally from 57.8% to 55.3%. The pace of price rise in LPG eased to 32% from 53.2% in June.
“Inflation in July, 2022 is primarily contributed by rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, electricity, chemicals & chemical products, food products etc. as compared to the corresponding month of the previous year,” noted the Department for Promotion of Industry and Internal Trade in the Commerce and Industry Ministry.
The pace of wholesale price rise in food items dropped from 12.41% in June to 9.41% in July, led by a sharp drop in vegetable inflation to 18.25%, the lowest rate in at least six months and less than a third of the 56.75% inflation recorded in June.
Inflation in milk dropped to a four-month low of 5.45%, while eggs, meat, and fish prices rose at the slowest pace in three months at 5.55%. However, cereals (9.76%), potato (53.5%), fruits (29.44%), and paddy (3.1%) hit their highest level of inflation in at least six months. Wheat inflation hit a four-month high of 13.61%, from 10.34% in June.
Manufactured products saw a broad-based decline in price rise to 8.16% from 9.19% in July. Pharma and leather products bucked the trends to hit the highest inflation rate in at least six months at 4.17% and 4.77%, respectively. Semi-finished steel products were the only other manufactured item to see a rise in inflation, albeit marginally, to 11.11% from 10.73% in June.