According to the commerce ministry, India’s wholesale price index (WPI) inflation fell to an 11-month low of 12.41 percent in August. In July, WPI inflation was 13.93%. It was 11.64 percent in August 2021. Another month of double-digit wholesale price increases in August 2022 means WPI inflation has remained above 10% for 17 months in a row.

WPI inflation fell sharply in August, driven by a drop in fuel prices, with fuel and electricity inflation falling to 33.67 percent from 43.75 percent in July. The ‘fuel and power’ indicator was down 4.8 percent sequentially from July. Meanwhile, the WPI’s other two key groupings, primary articles, and manufactured products, saw their indices rise 0.6 and 0.1 percent month on month, respectively. Overall, the WPI’s all-commodity index fell 0.5 percent in August compared to July.


The steep drop in wholesale inflation in August follows data released on September 12 that showed headline retail inflation jumped by over 30 basis points last month. According to the statistics ministry, the more carefully monitored Consumer Price Index (CPI) inflation climbed to 7% in August from a five-month low of 6.71 percent in July, owing to an increase in food costs, notably cereals, vegetables, and pulses.

The Reserve Bank of India, on the other hand, will take hope from the significant drop in WPI inflation, despite the fact that the central bank’s inflation mission is defined in terms of CPI inflation. The central bank has lifted the repo rate by 140 basis points in the last four months to 5.4 percent, and the policy rate is largely projected to be raised by 25-50 basis points at its meeting later this month. The Monetary Policy Committee is set to convene next on September 28-30.

What is WPI

The Wholesale Price Index (WPI) is the wholesale price of a typical basket of items. WPI movements are used as the primary measure of inflation in some countries, such as the Philippines. However, India has now adopted a new CPI to gauge inflation.

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