WPI inflation contracts for six months in a row

Wholesale prices, as measured by the wholesale price index (WPI), contracted for the sixth consecutive month in September, according to data released on Monday by the Union ministry of commerce and industry, coming in at -0.26% from -0.52% for the previous month.

- Roshan Kishore

The contraction of nearly 0.3% in September 2023's WPI print positively surprised analysts. A Bloomberg poll of economists had projected a 0.3% expansion in WPI for September 2023.

The lower-than-expected WPI data comes after a sharp fall in the benchmark inflation rate, as measured by the consumer price index (CPI), from 6.8% to 5% between August and September.

The contraction in WPI in September is driven by an annual contraction in prices of manufactured products, and fuel and power, which account for 64.2% and 13% of the WPI basket.

To be sure, the September WPI numbers also saw a sharp fall in vegetable inflation from 67.6% and 48.4% in July and August 2023, to 15% disinflation in September.