WPI inflation snapped the two-month easing trend and rose in August. It remained in double-digit for the fifth consecutive month. In July 2021, WPI inflation stood at 11.16 per cent.
Retail inflation, data for which came Monday, eased to 5.3% in August mainly on account of falling food prices.
The RBI tracks retail inflation, which is measured by Consumer Price Index, for deciding the rate of interest during MPC’s monetary policy deliberations.
Fuel and power prices rose 26.09% in August year-on-year compared with 26.02% in July, while manufactured product prices rose 11.39% compared with 11.20% in the previous month.
However, wholesale prices of food rose at a slower pace of 3.43% in August on-year compared to 4.46% in the previous month.
“The core-WPI inflation has displayed an uninterrupted hardening for 15 consecutive months to a fresh-all time high of 11.1% in August 2021, belying our anticipation that the July 2021 print would prove to be the peak. After two soft MoM prints of 0.3% each in June and July, the sequential momentum for core items hardened to 0.7% in August 2021, led by heavyweights such as metals, vehicles, chemicals and electrical equipment,” Aditi Nayar, chief economist, ICRA, said.
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