InvestorQ : What does falling WPI inflation reported on Monday mean for markets?
diksha shah made post

What does falling WPI inflation reported on Monday mean for markets?

Answer
image
Dilmini Mercia answered.
4 months ago
Follow

WPI inflation or Producer Inflation fell for the second month in succession and that was expected to fall in sync with the retail inflation, which had also tapered in the month of July 2021. In fact, WPI inflation fell 91 bps from 12.07% to 11.16% on sequential basis. However, this was largely led by a fall in the food inflation although the inflation for manufactured goods and crude oil remained elevated.

In terms of specifics of WPI inflation, there was a spike in the prices of basic metals, crude oil, textiles and chemicals. This is important as these are the items that have been contributing to higher input costs for manufacturers in India. This is the second consecutive month of cooling WPI inflation. However, the risk that is visible is that the crude oil inflation was up at 40.3%, despite the recent fall in crude and that is due to steep taxes.

4 Views