WPI inflation slows for the third month in a row

#GS3 #Economy

Prices in the wholesale market fell for the third straight month, declining 1.81% in June, due to a sharp decline in fuel and power items even as food articles remained expensive. 


  • Inflation in May and April was (­) 3.21% and (­) 1.57%, respectively. In March it was 0.42%. 
  • “The annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at (­1.81%) (provisional) for June compared to 2.02% during the corresponding month of the previous year,” the Industry Ministry said.
  • However, prices of food articles hardened with inflation at 2.04%, as against 1.13% in May. 
  • While inflation in vegetables and onion stood at (­) 9.21% and (­) 15.27%, respectively; potato saw a spike in prices with inflation at 56.20%. 


  • The Wholesale Price Index represents the price of a basket of wholesale goods. 
  • WPI focuses on the price of goods that are traded between corporations. It does not concentrate on goods purchased by the consumers.
  • The main objective of WPI is monitoring price drifts that reflect demand and supply in manufacturing, construction and industry.
  • WPI helps in assessing macroeconomic as well as microeconomic conditions of an economy.

WPI in India

  • Generally, WPI and CPI (Consumer Price Index) are used to calculate the inflation rates. In India, Inflation rates are based on WPI which is released by the Ministry of Commerce and Industry. 
  • The CPI is a measure that assesses the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, purchased by households. 
  • India experienced its highest inflation rate of 34.68 percent in September of 1974. And the lowest rate touched -11.31 percent in May 1976. 
  • Inflation rates are based on WPI which is released by the Office of Economic Advisor under the Ministry of Commerce and Industry.
  • 2011-2012 is the base year for the Wholesale Price Index (WPI).

Source: The Hindu

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