For the week ending 13 Sep ’08, headline (wholesale price index, WPI) inflation was 12.14%. The alarming part is the change to provisional inflation data for 19 Jul ’08 which has been raised 56bps to 12.54%. This revision is unexpectedly high and almost across-the-board.
The fall in the manufactured price index for two successive weeks is encouraging as such prices are generally more downwardly rigid than primary prices. If this trend continues, inflation could soften much faster than our current projection.
Vegetables, pulses, oil seeds and oil cake prices declined on a w-o-w basis. At the broader level, manufactured prices fell, primary prices rose and fuel remained unchanged.
Check out our Detailed Post on What Commodities and Materials make up the Indian Inflation Index.