NEW DELHI: India’s wholesale price inflation turned positive in August after a gap of four months, during which it remained in deflationary territory, indicating that producers are slowly regaining their pricing power after the shock of supply and demand caused by the coronavirus pandemic.
Data released by the industry department on Monday showed that wholesale price index inflation stood at 0.16% in August versus a 0.58% contraction in July, as manufactured goods inflation it accelerated to 1.27% from 0.51% during the same period. During August, crude oil prices softened 17.44% from the previous year, while fuel prices fell 9.7% from their levels of the previous year.
Ten of the 17 manufactured product categories listed in WPI, including food products, oils, beverages, tobacco, pharmaceuticals, cement, and base metals, saw prices rise from their level a year ago as demand gradually recovered. after the lifting of the blockade.
While retail inflation remains elevated above the upper limit of the Reserve Bank of India tolerance level, most analysts believe that the central bank can continue to hold rates on hold. The monetary policy committee had cut the policy rate cumulatively by 135 basis points between February 2019 and the start of the pandemic.
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