WPI inflation broke the two-month easing trend and increased in August. It remained in double digits for the fifth consecutive month. In July 2021, IPM inflation stood at 11.16%.
Retail inflation, the data for which came in on Monday, fell to 5.3% in August mainly due to falling food prices.
The RBI tracks retail inflation, which is measured by the Consumer Price Index, to decide the interest rate during MPC’s monetary policy deliberations.
Fuel and energy prices were up 26.09% in August compared to 26.02% in July, while prices of manufactured goods were up 11.39% from 11.20% in the previous month. .
However, wholesale food prices increased at a slower pace of 3.43% in August year-on-year compared to 4.46% the previous month.
“WPI core inflation has shown an uninterrupted tightening for 15 consecutive months to a new all-time high of 11.1% in August 2021, belying our anticipation that the July 2021 printing would prove to be the peak. After two soft MoM prints of 0.3% each in June and July, the sequential momentum for core elements tightened to 0.7% in August 2021, led by heavyweights such as metals, vehicles, chemicals and electrical equipment, “he said Aditi Nayar, ICRA Chief Economist.