India’s Wholesale Price Inflation for July 2013 threw up a surprise. While consumer prices rose to 8%, we saw wholesale inflation drop to 5.19% in a strange turnaround.
And component wise, it gets stranger:
Primary Articles (mainly food) was up only 6.78%, while in CPI it was up over 9%.
Data for May was revised upwards, to 6.18% (from 6.01%).
But this is strange data all right - how else can we see higher inflation in CPI and lower in the WPI? Something’s fishy.
The big differentiator has been vegetable prices which have a +11% inflation in CPI and a -1.6% in WPI. This is also because inflation in vegetables last year, July 2013, was at 46% in the WPI, and only 16% in the CPI. This might be because of the base effect.