India’s WPI Inflation Remains Negative For Fourth Straight Month In July

India’s wholesale price index remained negative in July for the fourth month, showing that the wedge between rising consumer prices and falling wholesale prices persists. A difference in composition in the indices along with supply disruptions in some categories may be causing the divergence.

WPI inflation stood at -0.58% in July compared with -1.81% in June, according to data released by the Ministry of Commerce and Industry on Friday. A Bloomberg poll of 19 economists had estimated WPI inflation at -0.54%.

CPI inflation, released a day prior, rose to 6.93%, led by higher retail prices of food items and transportation.

WPI Inflation Internals

• In July, the primary articles inflation rose by 0.63% compared to -1.21% in June.
• Manufactured products inflation rose by 0.51% compared to 0.08% in June.
• Prices of food articles rose by 4.08% compared with a rise of 2.04% in the previous month.
• The index of non-food articles fell by 3.57% against a drop of 2.8% last month.
• The fuel and power index contracted 9.84% against a fall of 13.6% in June.