Mumbai: India’s wholesale price inflation rose to 9.92% in August from 9.78% in July, as food, fuel and power prices increased.
The August figure was slightly higher than the 9.89% average forecast by economists in a Reuters poll. Wholesale inflation has remained close to 10% for several months, indicating continued price pressure in the wholesale sector.
Wholesale food inflation rose to 7.05% in August from 6.65% in July. The increase added to overall pressure on wholesale prices.
The increase in energy prices was more pronounced. Fuel and power prices rose 22.93% in August, compared with 20.05% in July.
Within that category, petroleum and natural gas prices rose 34.41% in August, compared with 26.99% in July.
Prices of manufactured products also increased. Wholesale inflation for manufactured products stood at 8.37% in August, compared with 8.29% a month earlier.
The figures show increases across food, manufactured products, fuel and power, with energy prices recording the strongest rise.
The latest data come as India faces continued pressure from food and energy costs. India relies heavily on imported crude oil, making domestic prices sensitive to changes in global oil markets.
The increase in wholesale prices is also being watched by the Reserve Bank of India as it considers the outlook for inflation and monetary policy.
The central bank kept its policy rate at 5.25% at its August meeting and maintained a neutral policy position. RBI officials have been monitoring the risk that higher food, fuel and other input costs could lead to broader inflation.
However, the latest wholesale inflation figure does not by itself mean that the central bank will raise interest rates. Wholesale inflation measures price changes at an earlier stage of the supply chain, while consumer inflation is more directly linked to the prices paid by households.
Economists surveyed by Reuters had expected India’s consumer inflation to rise to 4.80% in August from 4.45% in July, partly because of higher food and fuel prices. That 4.80% figure was an economist forecast and should not be confused with the confirmed wholesale inflation figure of 9.92%.
The latest wholesale inflation data also show that the increase from July was relatively modest. The annual rate rose by 0.14 percentage points, rather than recording a sharp monthly jump.
For businesses, continued increases in wholesale prices can raise the cost of raw materials, energy and production. Whether these higher costs reach consumers depends on factors including demand, competition, supply conditions and international prices.
The August figures therefore point to continued price pressure in India, particularly from energy and food. Policymakers and businesses will be watching whether these pressures remain concentrated in specific sectors or begin to spread more widely across the economy.