August inflation rose to 6.9% versus 6.87% in July: ET Now poll

NEW DELHI: The Wholesale Price Index (WPI) for the month of August likely rose marginally to 6.9% versus 6.87% in the month of July, says an ET Now poll. The consensus estimates of the poll range from a low of 6.5% to a high of 7.5%.

The primary articles inflation may have risen to 10.68% versus 10.39% in July. While fuel and power inflation may have remained around 5.9% versus 5.98% in July, manufactured products inflation may have risen to 6% versus 5.58%.

The poll predicted that monsoon may not a huge adverse impact on inflation, contrary to earlier expectations. While food prices continue to remain high, they have largely stabilized. The poll participants see a high base effect impacting the food and fuel price inflation numbers on a year-on-year basis.

Core inflation increased last month and is expected to remain above 5%. The Consumer Price Index (CPI) continues to remain high near 10%. WPI is expected to remain in the 7-7.2% range for the rest of the financial year. The Reserve Bank of India (RBI) has already revised its inflation expectations to 7% as against 6.5% earlier.

A hike in fuel prices, weak rupee and high commodity prices are seen having a negative impact on inflation. The poll participants acknowledged the need for supply side measures to curb inflation. The requirement of government action to contain fiscal deficit and revive investment climate was also emphasised.

The RBI is widely expected to stick to its anti-inflationary stance and a majority of poll participants do not expect the central bank to cut interest rates in its September 17 monetary policy review.