WPI may inch up if oil prices go back to higher levels: Indranil Pan, Kotak Mahindra Bank

In a chat with ET Now, Indranil Pan, Chief Economist, Kotak Mahindra Bank, shares his view on the latest WPI numbers. Excerpts:

ET Now: The WPI has contracted more than what was being expected. Your overall take on the latest figures?

Indranil Pan: The fact is that it is the commodity cycle which is actually leading to the significant downside in WPI. Relatively, the share of the primary articles in food is much lower in WPI than in CPI.

In the same period last year, oil prices were significantly on the higher side. Compared to that, we now have oil at considerably lower levels. I think this trend would possibly continue till around August-September.

After that we should once again see WPI in the positive territory. So, all in all, one can say that more than anything else, it is purely the commodity cycle turning adverse in the current scenario.