UPDATE: Aug WPI Inflation at 7.55% vs 6.87% m-o-m

Food articles inflation down 0.4% at 9.14% in Aug 2012 vs 10.06% from a month ago

Inflation rose to 7.55% in August as prices of potato, wheat and pulses as well as manufactured items soared, which may restrain RBI from cutting interest rates at its monetary policy review next week.

Inflation, as measured by the Wholesale Price Index (WPI), was 6.87% in July.

In August last year, however, it was 9.78%.

Overall, food inflation declined to 9.14% in August, from 10.06% in July. Food articles have 14.3% share in the WPI basket.

In the manufactured items category, prices rose for cotton textiles, paper and paper products, cement and lime.

The rate of price rise in the manufactured products was 6.14% in August, as against 5.58% in July.

 

In the food articles category, pulses turned expensive by 34.39% in August, wheat by 12.85% and cereals by 10.71% on an annual basis.

Besides, potatoes turned costlier by 68.86% and rice by 10.29%.

Inflation in eggs, meat, fish prices was 13.77%, while in milk and fruits it was was 6.68% and 1.14% respectively.

Vegetables became costlier by 9.98% in August, year-on-year. Inflation in this segment was 24.11% in July.

However, the pressure on prices of onions declined during August to (-) 20.67%.

In non-food articles, inflation in oil seeds was 28.33%, fibres (3.53%) and minerals (9.74%).

Besides, inflation for June was revised upwards to 7.58%, from 7.25% as per provisional estimates.

The Reserve Bank is scheduled to come out with its policy review on Monday in which it is likely to hold policy rates steady as inflation still remains above comfort zone.