India’s wholesale price inflation remained close to a record high in August, rising to 9.92% from 9.78% in July, as fuel, food and manufactured product prices continued to drive wholesale price pressures, according to a government release.

The August reading is the second-highest in the current WPI series with 2022-23 as the base year, after the June reading. The government has since revised June WPI inflation to 9.97% from the provisional estimate of 9.87%, making the June print the highest so far in the new series.

The August increase was driven primarily by fuel and manufactured products. Fuel and power inflation accelerated to 22.93% from 20.05% in July, while manufactured products inflation edged up to 8.37% from 8.29%. Primary articles inflation, in contrast, moderated to 7.76% from 8.52%.

Fuel pressures remained significant, with mineral oils and petroleum-related products among the major contributors to the August increase. The government identified mineral oils, food articles, manufactured food products, basic metals, non-food articles and chemicals as key drivers of WPI inflation.

Food inflation also moved higher, with the WPI Food Index rising to 7.05% from 6.65% in July. The index, which has a 24.99% weight in WPI, combines food articles under primary articles and manufactured food products.

The rise in manufactured prices suggests that wholesale inflation is not being driven only by crude and primary commodities. Manufactured food products, chemicals, basic metals and other industrial inputs continued to record elevated inflation, raising the risk of cost pressures feeding into downstream prices.

The cumulative WPI inflation for April-August stood at 9.56%, sharply higher than a contraction of 0.20% during the corresponding period of the previous financial year. Fuel and power inflation averaged 25.20% during the first five months of the current fiscal, while manufactured products inflation averaged 7.78%.

The August WPI data is last print before October monetary policy. August CPI inflation is due later today.  A poll of economists has projected August headline CPI inflation at around 4.8%, up from 4.45% in July, with food inflation seen accelerating to around 5.8%. Core inflation is expected to remain close to 4%.

A CPI print around the estimate would indicate that consumer inflation is moving towards upper band of the RBI’s 2-6% inflation range.  End