India Wholesale Inflation Slows to 2-Year Low

Wholesale prices in India rose by 2.02 percent year-on-year in June 2019, easing from a 2.45 percent gain in the previous month and below market expectations of 2.35 percent. It was the lowest wholesale inflation rate since July 2017, amid a slowdown in cost of manufactured products and a marked decline in fuel prices.

Manufactured products inflation eased to 0.94 percent in June from 1.28 percent in May, amid a slowdown in cost of chemical & chemical products (1.45 percent vs 1.96 percent), textiles (2.67 percent vs 3.46 percent), and rubber and plastics (0.18 percent vs 0.65 percent); and a further drop in prices of basic metals (-3.72 percent vs -2.23 percent). Meantime, cost of wood and of products of wood and cork rose faster (1.43 percent vs 0.67 percent).

In addition, cost of fuel & power fell by 2.2 percent, reversing a 0.98 percent advance a month earlier.

Meanwhile, prices of primary articles advanced 6.72 percent, faster than 6.16 percent in May, as cost of food articles continued to rise (6.98 percent vs 6.99 percent in May), namely vegetables (24.76 percent vs 33.15 percent), cereals (7.93 percent vs 7.9 percent), wheat (5.38 percent vs 6.35 percent), fruits (1.87 percent vs -3.51 percent), and milk (0.91 percent vs 1.13 percent). Conversely, potato prices fell further (-24.27 percent vs -23.36 percent).

On a monthly basis, wholesale prices increased by 0.2 percent in June, the same pace as in May.

India Wholesale Inflation Slows to 2-Year Low

Office of the Economic Advisor | Rida Husna |
7/15/2019 1:00:52 PM