As per the recent data released by the government on Monday (July 15), the Wholesale Price Index (WPI) inflation in India for the month of June 2024 has hit 16-month high, reaching 3.36 per cent year-on-year (YoY), up from 2.61 per cent in May 2024.
WPI, which measures the inflation based on the prices of goods before they reach to the consumers is marked into three major index, that is, Primary Articles, Fuel & Power, and Manufactured Products.
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This recent surge in WPI inflation rate is primarily driven by factors such as the increasing rates of food articles, manufactured food products, crude petroleum, and natural gas.
WPI Components
Primary Articles: This segment, with a weight of 22.62 per cent, saw an inflation rate of 8.80 per cent in June 2024 compared to 7.20 per cent in the previous month.
The factors which is mainly considered to the surge is due to the significant increase in the food articles, which rose by 2.96 per cent month-on-month (MoM) .
Fuel & Power: In this index, it weight 13.15 per cent of the WPI, and saw a decline of 1.93 per cent in June 2024 compared to May 2024.
Screengrab - Index Numbers and Annual Rate of Inflation (Y-o-Y in %) |
Manufactured Products: This index held the largest weight of 64.23 per cent and reported a modest surge to 1.43 per cent in June 2024 from 0.78 per cent in May 2024.
It was mostly driven by factors such as rising prices in food products, chemicals, textiles, and motor vehicles, among the others.
Screengrab - Month Over Month (M-o-M in %) change in WPI Index |
Monthly Changes
The month-over-month change in the WPI for June 2024 stood at 0.39 per cent, which saw a steady increase from the previous months
The food index, which combines food articles from the Primary Articles group and food products from the Manufactured Products group, rose by 2.48 per cent from May to June 2024."
Food Inflation
The food inflation which is a major contributor to the overall surge in the wholesale inflation, the food Index rose from 7.40 per cent in May 2024 to 8.68 per cent in June 2024.
The higher prices of vegetables and pulses have driven this surge, with retail inflation for items like potatoes and onions reaching as high as 50 per cent.
