India's wholesale prices took a significant dip in July, with a year-on-year decrease of 0.58%. This decline, reported by government data on Thursday, marks a stark contrast to the 0.13% drop seen in the previous month. The decrease was primarily driven by a notable fall in food prices, according to the official data.
Economists surveyed by Reuters had anticipated a smaller decline of 0.3% in the wholesale price index for July. However, the actual figures show a more substantial decrease, particularly in the food sector.
In July, wholesale food prices plummeted by 2.15% year-on-year, a considerable drop from the 0.26% decline observed in June. Of particular note was the sharp decline in vegetable prices, which fell by 28.96% compared to a 22.65% decrease in June.
On the other hand, prices of manufactured products saw a modest increase, rising by 2.05% year-on-year in July, up from 1.97% in June. This uptick in manufacturing prices could potentially offset the overall deflationary trend observed in the wholesale market.
Fuel and power prices also experienced a decline, albeit less severe than initially projected. Prices in this category fell by 2.43% year-on-year in July, showing a slight improvement from the 2.65% decline seen in June.
The mixed bag of price movements in various sectors suggests a varied outlook for India's wholesale market. While food prices continue to plummet, other sectors such as manufacturing are showing some resilience.
Overall, the latest data indicates a complex economic landscape in India, with different sectors responding differently to prevailing market conditions. The coming months will be crucial in determining the trajectory of wholesale prices in the country, as businesses and policymakers closely monitor these developments.
