The rate of increase in wholesale prices slowed significantly in the month of July according to the latest government data, providing some relief to businesses that were grappling with rising costs over the past few months.
The wholesale price index, which measures the changes in prices of goods sold in bulk between businesses, rose by 2.04% in July as compared to 3.36% in June. This marks the ending of a 4 month streak of continual price rises at the wholesale level.
Primary items such as farm and mineral products saw the rate of price increase come down to 3.08% in July from 8.80% in the previous month. Fuel costs continued rising but at a more modest pace of 1.72% compared to 1.03% in June. Manufactured goods inflation inched up slightly to 1.58% from 1.43%.
The decline in wholesale inflation mirrored reduced pressures at the consumer level, where retail or consumer inflation fell to a 59 month low of 3.54% in July aided by a high base from last year. Both wholesale and consumer prices had been on the upswing for most of this year led by geopolitical tensions and supply disruptions.
The central bank, which focuses on retail inflation for its policy decisions, kept interest rates steady for the ninth meeting in a row noting signs of moderation in price pressures. The recent wholesale data adds to evidence that inflated costs may have peaked giving some breather to producers and consumers alike. Wholesale prices are a crucial indicator for businesses and the slowing of their rise could help ease financial burdens.
