India’s Wholesale Price Index Declines in July, Signaling Deflationary Tendencies

Date: August 14, 2023

The economic landscape of any country is a dynamic tapestry woven with various threads, each representing different sectors, factors, and influences. In India, the recent release of the All India Wholesale Price Index (WPI) for July 2023 has shed light on the intricate interplay of economic forces, signaling both opportunities and challenges for the nation’s growth trajectory. This comprehensive analysis delves into the nuances of the WPI data, providing insights into key sectors, inflation trends, and potential implications for policymakers.

A Glance at the Numbers:

The July 2023 WPI stands at -1.36%, reflecting a decline compared to the same period in 2022. This deflationary trend is attributed to falling prices across significant sectors such as mineral oils, basic metals, chemical & chemical products, textiles, and food products. Inflation, as measured by the annual WPI, has moderated from -4.12% in June 2023 to its current value. These numbers, though seemingly straightforward, unveil a complex economic narrative that requires careful analysis.

Table 1: WPI Data Overview (Last Three Months)

Commodity Groups	Weight (%)	May-23 (F)	June-23 (P)	July-23 (P)
All Commodities	100.0	149.4	-4.12	151.9
Primary Articles	22.62	175.1	-2.87	190.5
Fuel & Power	13.15	148.6	-12.63	145.3
Manufactured Prods	64.23	140.6	-2.71	139.6
Food Index	24.38	172.9	-1.24	187.7

Primary Articles: A Mixed Bag of Growth:

The Primary Articles category, accounting for 22.62% of the index, witnessed a notable increase of 8.05% in July 2023, reaching an index value of 190.5. This growth is led by a surge in Food Articles (10.55%), Crude Petroleum & Natural Gas (4.40%), and Non-food Articles (2.27%). However, the index for Minerals saw a decline of -3.17%, adding to the intricate dynamics of the overall index.

Table 2: Primary Articles – Month-over-Month Changes (Last Six Months)

Commodity Groups	Weight	Feb-23	Mar-23	Apr-23	May-23	Jun-23 (P)	Jul-23 (P)
Primary Articles	22.62	-0.40	0.92	1.48	-1.52	0.69	8.05

Fuel & Power: Navigating Fluctuations:

The Fuel & Power sector, accounting for 13.15% of the index, experienced a modest decline of 0.48% in July 2023, reaching an index value of 145.3. This fluctuation was driven by varying trends in Coal (0.07%), Electricity (-0.45%), and Mineral Oils (-0.65%). These dynamics underline the challenges in maintaining stability within this crucial sector.

Table 3: Fuel & Power – Month-over-Month Changes (Last Six Months)

Commodity Groups	Weight	Feb-23	Mar-23	Apr-23	May-23	Jun-23 (P)	Jul-23 (P)
Fuel & Power	13.15	1.29	-0.76	-2.37	-2.69	-1.75	-0.48

Manufactured Products: A Varied Landscape:

The Manufactured Products category, with a weight of 64.23%, saw a slight decline of 0.29% in July 2023, marking an index value of 139.6. Among the 22 NIC two-digit groups for manufactured products, 11 observed price increases, while 10 experienced decreases. This diverse trend highlights the multifaceted nature of this sector.

Table 4: Manufactured Products – Month-over-Month Changes (Last Six Months)

Commodity Groups	Weight	Feb-23	Mar-23	Apr-23	May-23	Jun-23 (P)	Jul-23 (P)
Manufactured Prods	64.23	0.14	-0.21	0.07	-0.57	-0.43	-0.29

WPI Food Index: Balancing Act Ahead:

The Food Index, comprising ‘Food Articles’ and ‘Food Products’, increased from 175.2 in June 2023 to 187.7 in July 2023. This surge, primarily driven by an increase in Food Articles, calls for focused attention due to its potential impact on overall inflation. The annual inflation rate based on the WPI Food Index escalated from -1.24% in June 2023 to 7.75% in July 2023.

Table 5: WPI Food Index – Month-over-Month Changes (Last Six Months)

Commodity Groups	Weight	Feb-23	Mar-23	Apr-23	May-23	Jun-23 (P)	Jul-23 (P)
WPI Food Index	24.38	-0.12	0.47	1.10	-0.63	1.33	7.13

Navigating the Road Ahead:

The intricate dance of these numbers underscores the delicate nature of India’s economic trajectory. The decline in the All India Wholesale Price Index for July 2023 signals deflationary tendencies in various sectors, yet the rising WPI Food Index raises concerns over food inflation. Policymakers must tread cautiously, balancing the need for stability with targeted interventions to address sector-specific challenges.

In conclusion, the July 2023 WPI data encapsulates the intricate balance between multiple economic facets. As prices oscillate in key sectors, India’s economic future depends on the ability of policymakers to harness the strengths of growth and mitigate the risks posed by inflationary pressures. A proactive approach, driven by a deep understanding of these indices, will be paramount in steering India’s economy towards a stable and sustainable future.

All India Wholesale Price Indices and Rates of Inflation (Base Year: 2011-12=100) for July, 2023

Commodities/Major Groups/Groups/Sub-Groups/Items	Weight	Index(July-23)*	Latest month over month		Cumulative Inflation (YoY)		WPI Based rate of Inflation (YoY)
			2022-2023	2023-2024*	2022-2023	2023-2024*	July-22	July-23*
ALL COMMODITIES	100.0	151.9	-0.90	1.95	15.57	-2.48	14.07	-1.36
I. PRIMARY ARTICLES	22.62	190.5	-2.42	8.05	16.85	1.14	14.78	7.57
A. Food Articles	15.26	204.4	-1.97	10.55	11.18	5.26	10.77	14.25
Cereals	2.82	186.4	1.06	1.03	8.47	7.81	9.76	8.31
Paddy	1.43	181.2	0.42	1.68	2.18	7.80	3.10	9.03
Wheat	1.03	187.5	1.05	0.11	11.38	7.69	13.61	8.01
Pulses	0.64	191.9	1.45	1.80	-1.25	7.57	1.33	9.59
Vegetables	1.87	367.2	-12.82	81.15	37.80	3.89	18.46	62.12
Potato	0.28	220.3	12.47	7.99	37.22	-21.05	54.51	-24.40
Onion	0.16	184.8	14.31	27.98	-21.66	-5.42	-25.93	7.13
Fruits	1.60	171.7	1.24	-6.99	14.59	-3.40	29.64	-8.91
Milk	4.44	177.8	0.12	-0.28	5.79	8.28	5.45	8.15
Eggs, Meat & Fish	2.40	176.2	-1.25	-2.17	5.57	1.88	5.55	1.79
B. Non-Food Articles	4.12	162.4	-2.33	2.27	19.75	-7.87	12.88	-5.47
Oil Seeds	1.12	188.1	-4.32	1.02	5.20	-13.87	-4.06	-9.61
C. Minerals	0.83	208.0	-4.17	-3.17	11.74	4.84	5.50	5.21
D. Crude Petroleum & Natural gas	2.41	144.7	-4.99	4.40	72.89	-12.21	65.94	-13.66
Crude Petroleum	1.95	125.1	-6.57	7.11	68.85	-23.48	58.77	-22.83
II. FUEL & POWER	13.15	145.3	-0.30	-0.48	45.86	-8.62	44.62	-12.79
LPG	0.64	107.3	-7.77	-5.88	42.22	-19.45	32.00	-20.69
Petrol	1.60	156.0	-3.22	0.06	65.41	-9.87	55.30	-13.48
HSD	3.10	170.2	1.16	0.71	78.32	-14.00	72.41	-18.95
III. MANUFACTURED PRODUCTS	64.23	139.6	-0.49	-0.29	9.80	-2.64	8.24	-2.51
Mf/o Food Products	9.12	159.7	-1.60	0.50	8.49	-5.62	6.74	-3.97
Vegetable And Animal Oils and Fats	2.64	147.3	-7.03	1.03	10.15	-26.99	2.53	-22.60
Mf/o Beverages	0.91	131.1	-0.39	0.15	1.79	2.13	1.19	2.42
Mf/o Tobacco Products	0.51	171.5	1.16	-0.92	3.21	4.10	2.98	3.38
Mf/o Textiles	4.88	134.1	-1.34	-0.74	14.14	-8.22	12.61	-8.96
Mf/o Wearing Apparel	0.81	149.5	0.75	0.13	4.35	1.80	4.23	1.15
Mf/o Leather and Related Products	0.54	125.3	0.57	0.97	3.26	1.68	5.03	1.70
Mf/o Wood and of Products of Wood and Cork	0.77	144.6	0.85	-0.34	3.11	0.99	2.14	0.98
Mf/o Paper and Paper Products	1.11	141.6	-0.90	-1.87	16.60	-6.63	15.66	-8.29
Mf/o Chemicals and Chemical Products	6.47	137.3	-0.34	-0.72	14.55	-5.52	14.31	-7.10
Mf/o Pharmaceuticals, Medicinal Chemical and Botanical Products	1.99	142.4	0.14	-0.56	3.31	2.29	4.24	1.71
Mf/o Rubber and Plastics Products	2.30	126.8	-0.15	-0.24	8.38	-3.08	7.99	-3.28
Mf/o other Non-Metallic Mineral Products	3.20	134.9	-0.22	0.22	9.05	1.75	9.05	0.90
Cement, Lime and Plaster	1.64	137.7	-1.15	0.29	9.31	0.84	8.87	0.22
Mf/o Basic Metals	9.65	140.3	-0.40	-0.99	16.73	-7.74	11.49	-6.09
Mild Steel – Semi Finished Steel	1.27	122.3	0.71	0.49	13.39	-6.55	11.37	-4.68
Mf/o Fabricated Metal Products, Except Machinery and Equipment	3.15	138.6	-0.43	-0.65	10.46	-0.27	7.81	-0.57

Annex-II

Commodities/Major Groups/Groups/Sub-Groups/Items	Weight	WPI based inflation figures for last 6 months
		Feb-23	Mar-23	Apr-23	May-23	Jun-23*	Jul-23*
ALL COMMODITIES	100.0	3.85	1.41	-0.79	-3.61	-4.12	-1.36
I. PRIMARY ARTICLES	22.62	3.64	2.52	1.89	-1.90	-2.87	7.57
A. Food Articles	15.26	3.81	5.42	3.88	1.63	1.32	14.25
Cereals	2.82	13.95	9.48	7.69	6.89	8.34	8.31
Paddy	1.43	8.60	7.54	7.18	7.33	7.67	9.03
Wheat	1.03	18.48	9.16	7.56	6.20	9.02	8.01
Pulses	0.64	2.59	3.03	5.67	5.82	9.21	9.59
Vegetables	1.87	-21.58	-2.39	-1.50	-20.47	-21.98	62.12
Potato	0.28	-14.42	-25.59	-19.28	-18.10	-21.27	-24.40
Onion	0.16	-40.22	-36.83	-18.60	-7.25	-4.31	7.13
Fruits	1.60	7.32	4.89	-4.40	0.68	-0.86	-8.91
Milk	4.44	10.33	8.48	8.21	8.18	8.59	8.15
Eggs, Meat & Fish	2.40	1.49	1.36	0.88	2.07	2.74	1.79
B. Non-Food Articles	4.12	0.00	-4.51	-6.70	-9.51	-9.72	-5.47
Oil Seeds	1.12	-7.38	-15.05	-15.58	-15.60	-14.39	-9.61
C. Minerals	0.83	-3.33	-2.84	7.88	2.19	4.12	5.21
D. Crude Petroleum & Natural gas	2.41	14.47	-1.19	1.64	-13.66	-21.43	-13.66
Crude Petroleum	1.95	-10.22	-23.53	-9.44	-27.01	-32.68	-22.83
II. FUEL & POWER	13.15	13.96	8.69	0.99	-9.17	-12.63	-12.79
LPG	0.64	-7.12	3.31	-10.49	-24.35	-22.29	-20.69
Petrol	1.60	15.24	6.48	1.53	-9.51	-16.32	-13.48
HSD	3.10	24.61	11.85	1.42	-17.03	-18.59	-18.95
III. MANUFACTURED PRODUCTS	64.23	1.94	-0.70	-2.28	-3.03	-2.71	-2.51
Mf/o Food Products	9.12	0.87	-2.96	-5.53	-6.97	-5.98	-3.97
Vegetable and Animal Oils and Fats	2.64	-14.31	-22.02	-26.25	-29.92	-28.77	-22.60
Mf/o Beverages	0.91	2.12	2.60	2.51	1.71	1.87	2.42
Mf/o Tobacco Products	0.51	4.19	4.19	3.16	4.32	5.55	3.38
Mf/o Textiles	4.88	-3.65	-4.93	-5.90	-8.48	-9.51	-8.96
Mf/o Wearing Apparel	0.81	3.46	3.38	2.05	2.25	1.77	1.15
Mf/o Leather and Related Products	0.54	0.74	1.58	1.98	1.73	1.31	1.70
Mf/o Wood and of Products of Wood and Cork	0.77	-0.21	-0.97	-1.44	2.33	2.18	0.98
Mf/o Paper and Paper Products	1.11	3.28	-1.01	-4.23	-6.59	-7.38	-8.29
Mf/o Chemicals and Chemical Products	6.47	2.59	-0.07	-3.16	-5.03	-6.74	-7.10
Mf/o Pharmaceuticals, Medicinal Chemical and Botanical Products	1.99	3.26	2.68	2.29	2.73	2.43	1.71
Mf/o Rubber and Plastics Products	2.30	1.10	-1.31	-2.51	-3.33	-3.20	-3.28
Mf/o other Non-Metallic Mineral Products	3.20	6.79	5.40	3.60	2.12	0.45	0.90
Cement, Lime and Plaster	1.64	8.18	6.24	3.60	0.88	-1.22	0.22
Mf/o Basic Metals	9.65	-0.14	-7.17	-9.86	-9.23	-5.53	-6.09
Mild Steel – Semi Finished Steel	1.27	1.55	-4.76	-8.70	-8.18	-4.47	-4.68
Mf/o Fabricated Metal Products, Except Machinery and Equipment	3.15	4.19	2.88	0.50	-0.64	-0.36	-0.57

Note: * = Provisional, Mf/o = Manufacture of

Annex-III

Commodities/Major Groups/Groups/Sub-Groups/Items	Weight	WPI Index for last 6 months
		Feb-23	Mar-23	Apr-23	May-23	Jun-23*	Jul-23*
ALL COMMODITIES	100.0	150.9	151.0	151.1	149.4	149.0	151.9
I. PRIMARY ARTICLES	22.62	173.6	175.2	177.8	175.1	176.3	190.5
A. Food Articles	15.26	176.9	178.8	182.1	181.3	184.9	204.4
Cereals	2.82	187.1	183.6	183.5	183.1	184.5	186.4
Paddy	1.43	175.6	175.4	176.2	177.2	178.2	181.2
Wheat	1.03	196.8	187.1	186.4	184.9	187.3	187.5
Pulses	0.64	178.0	180.4	184.6	183.6	188.5	191.9
Vegetables	1.87	166.8	175.7	183.9	178.3	202.7	367.2
Potato	0.28	146.0	135.2	157.0	190.0	204.0	220.3
Onion	0.16	159.5	138.1	128.2	129.2	144.4	184.8
Fruits	1.60	180.3	186.6	201.9	191.2	184.6	171.7
Milk	4.44	174.1	175.3	176.7	177.3	178.3	177.8
Eggs, Meat & Fish	2.40	169.8	171.9	171.1	177.2	180.1	176.2
B. Non-Food Articles	4.12	170.2	167.1	165.6	162.8	158.8	162.4
Oil Seeds	1.12	199.5	192.5	191.8	188.8	186.2	188.1
C. Minerals	0.83	217.5	222.4	224.6	214.8	214.8	208.0
D. Crude Petroleum & Natural gas	2.41	143.2	149.8	155.0	142.9	138.6	144.7
Crude Petroleum	1.95	115.9	123.8	133.4	119.2	116.8	125.1
II. FUEL & POWER	13.15	157.6	156.4	152.7	148.6	146.0	145.3
LPG	0.64	117.4	137.4	134.0	117.1	114.0	107.3
Petrol	1.60	160.3	159.4	159.5	157.0	155.9	156.0
HSD	3.10	183.8	176.5	171.7	169.5	169.0	170.2
III. MANUFACTURED PRODUCTS	64.23	141.6	141.3	141.4	140.6	140.0	139.6
Mf/o Food Products	9.12	161.9	160.8	160.5	158.9	158.9	159.7
Vegetable and Animal Oils and Fats	2.64	162.9	157.9	155.4	149.7	145.8	147.3
Mf/o Beverages	0.91	130.3	130.3	130.9	130.6	130.9	131.1
Mf/o Tobacco Products	0.51	166.5	169.2	169.8	171.4	173.1	171.5
Mf/o Textiles	4.88	137.2	136.8	137.2	135.9	135.1	134.1
Mf/o Wearing Apparel	0.81	149.7	150.0	149.5	150.0	149.3	149.5
Mf/o Leather and Related Products	0.54	122.2	122.3	123.4	123.5	124.1	125.3
Mf/o Wood and of Products of Wood and Cork	0.77	142.6	143.0	143.9	145.0	145.1	144.6
Mf/o Paper and Paper Products	1.11	148.0	147.0	147.2	146.0	144.3	141.6
Mf/o Chemicals and Chemical Products	6.47	142.8	142.2	141.1	139.6	138.3	137.3
Mf/o Pharmaceuticals, Medicinal Chemical and Botanical Products	1.99	142.4	141.7	142.8	142.9	143.2	142.4
Mf/o Rubber and Plastics Products	2.30	128.7	128.3	128.4	127.6	127.1	126.8
Mf/o other Non-Metallic Mineral Products	3.20	135.3	134.6	135.2	134.7	134.6	134.9
Cement, Lime and Plaster	1.64	138.9	137.9	138.2	137.3	137.3	137.7
Mf/o Basic Metals	9.65	146.9	146.2	145.3	143.6	141.7	140.3
Mild Steel – Semi Finished Steel	1.27	124.8	126.0	122.8	122.4	121.7	122.3
Mf/o Fabricated Metal Products, Except Machinery and Equipment	3.15	139.1	139.2	139.5	139.7	139.5	138.6

Disclaimer: The data and analysis presented in this article are based on the All India Wholesale Price Index (WPI) data released by the Government of India. The author does not take responsibility for any decisions made based on this analysis without consulting appropriate financial and economic experts.

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