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Home / News / India /  Why WPI inflation remains low?

India's wholesale price inflation remained unchanged at 1.08% in August as inflation for manufactured items fell to 0%, signalling lack of pricing power of producers.

Many manufactured items saw negative inflation or deflation including vegetable and animal oils, leather and apparel products, paper, rubber, chemicals, steel, basic metals among others.

Fuel inflation also fell into negative territory. However, this may be short-lived due to disruption in crude oil supply from Saudi Arabia.

Food inflation accelerated to 7.67% in August from 6.15% a month ago.

Though RBI doesn't take into consideration wholesale price inflation for deciding it's monetary policy, low level of retail inflation and sagging growth conditions may force it to cut policy rate for fifth consecutive time in October.

Retail inflation quickened to 3.21% in August from 3.15% in the previous month, remaining within the comfort level of RBI.

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