WPI inflation increases to 11.39 per cent in August

The wholesale price-based inflation (WPI) increased marginally to 11.39 per cent in August 2021 due to higher prices of manufactured goods, even though the prices of food articles softened.

Highlights

• Inflation in August got reversed from the easing trend of two months (June and July).
• WPI remained in double-digit for the fifth consecutive month.
• In July 2021, WPI inflation was 11.16 per cent.
• WPI inflation was at 0.41 per cent, in August 2020.
• Retail inflation has softened to a four-month low of 5.3 per cent in August as compared to 5.59 per cent in the previous month.

Why WPI increased in August?

High rate of inflation in August 2021 is basically due to increase in prices of non-food articles, crude petroleum & natural gas, mineral oils, manufactured products such as basic metals, textiles, food products, chemicals & chemical products etc as compared to corresponding month in 2020.

Food inflation

Inflation in food articles decreased for the fourth straight month. It was recorded as (-) 1.29 per cent in August 2021 as compared to zero per cent in July 2021. For instance, inflation in onions was high at 62.78 per cent whereas in pulses was 9.41 per cent. For vegetables it was recorded as (-) 13.30 per cent in August 2021. Inflation in crude petroleum and natural gas was at 40.03 per cent.

Retail inflation

The Reserve bank of India (RBI) mainly takes into account the retail inflation. In the monetary policy of August 2021, RBI has kept interest rates unchanged at record lows. RBI projected Consumer Price Index (CPI) or retail inflation at 5.7 per cent for the year 2021-22.

Month: Current Affairs - September, 2021