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Business Standard
3 days ago
- Business
- Business Standard
WPI inflation stays negative for 2nd month in July as food, fuel prices dip
India's factory-gate inflation, based on the wholesale price index (WPI), fell to a two-year low of -0.58 per cent in July, staying in negative territory for the second consecutive month on the back of falling food and fuel prices, according to data released by the Ministry of Commerce and Industry on Thursday. Manufactured products, however, saw faster price increases during the month. The last time the WPI was this low was in July 2023, when it recorded deflation of -1.23 per cent. Data showed that prices of primary food articles (-6.3 per cent) fell for the third straight month, led by sharp declines in onion (-44.4 per cent), potato (-41.3 per cent), vegetables (-28.9 per cent), pulses (-15.12 per cent), fruits (-2.65 per cent), and protein-rich items like eggs, meat, and fish (-1.09 per cent). Wheat prices rose 4.4 per cent, while oilseeds saw a significant spike of 9.77 per cent. Fuel and power prices declined 2.43 per cent in July as lower global commodity prices, especially for mineral oils, kept petrol (-5.7 per cent) and high-speed diesel (-4.3 per cent) in deflation for the 14th and 27th consecutive month, respectively. Cooking gas prices, however, increased 1.23 per cent. Prices of manufactured products—which carry a 64 per cent weight in the index—rose 2.05 per cent in July, driven by apparel (2.5 per cent), leather (2.57 per cent), non-metallic mineral products (2.7 per cent), and cement and plaster (3.4 per cent). While price growth for manufactured animal oils and fats slowed, it remained in double digits at 22.04 per cent. Price increases for other manufactured items such as food products (6.7 per cent), paper (0.94 per cent), chemicals (0.22 per cent), and pharmaceuticals (0.9 per cent) also eased. Rahul Agrawal, Senior Economist at ICRA Ratings, said the July deflation was largely driven by the food segment, even as prices in all other categories firmed compared to the previous month. 'Similar to the CPI, the WPI is also likely to have bottomed out in July 2025. Looking ahead, we expect the headline WPI to re-enter inflationary territory in August after a gap of two months, amid hardening food and crude oil prices, rupee depreciation, and an unfavourable base. Heavy rains could push up perishable prices sharply in the second half of August, and this will be a key monitorable,' he said. The fall in WPI inflation comes days after India's retail inflation eased to an eight-year low of 1.55 per cent in July, helped by deeper deflation in several food categories even as edible oil prices surged at their fastest pace since the start of the Russia–Ukraine conflict in early 2022.
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Business Standard
30-06-2025
- Business
- Business Standard
Industrial output growth falls to a nine-month low of 1.2% in May
Growth in industrial production fell to a nine-month low of 1.2 per cent in May from a downward revised figure of 2.6 per cent in April. This is due to the high-base effect and a decline in the output of the mining and electricity sectors, according to data released by the National Statistics Office (NSO) on Monday. The index of industrial production (IIP) data showed that the output of the mining sector contracted (-0.1 per cent) for the second consecutive month. Meanwhile, output in the electricity sector (-5.8 per cent) declined for the first time since August 2024. Output in the manufacturing sector (2.6 per cent) further decelerated during the month. In May 2024, the IIP had grown by 6.3 per cent. Aditi Nayar, chief economist, ICRA Ratings, said that the early onset of the monsoon doused activity in mining and the demand for electricity. Both these sub-sectors of the IIP reported a contraction, amid an anemic growth in manufacturing. Earlier this month, government data also showed that output growth in India's eight core infrastructure industries plummeted to a nine-month low of 0.7 per cent in May from an upwardly revised figure of 1 per cent in April. Half of the sectors, including electricity, crude oil, fertilisers and natural gas clocked sharp contractions. According to use-based classification, the output in primary goods (-1.9 per cent) contracted for the second month in a row and output in consumer non-durables (-2.4 per cent) remained in the contractionary zone for the fourth consecutive month. Output growth in the consumer durables segment declined (-0.7 per cent) for the first time since November 2024. Meanwhile, output in the capital goods sector slightly accelerated (14.1 per cent), signalling improved investment activity in the economy. It was driven by both electrical and non-electrical machinery. Similarly, output in the infrastructure sector accelerated to 6.3 per cent during the month. Output in intermediate goods (3.5 per cent), however, decelerated during the month. At the two-digit level industrial classification, the number of sectors having positive growth in May came down to 13 from 16 sectors in April. These included sectors like food products, tobacco, apparel, wood products, rubber products, basic metals and electrical equipment, among others. Starting April 2025, IIP data is now being released on 28th of every month, thus bringing down the time lag from 42 days to 28 days from the reference month.
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Business Standard
20-06-2025
- Business
- Business Standard
Core sectors' growth plunges to a 9-month low of 0.7% in May 2025
Output growth in India's eight core infrastructure industries plummeted to a nine-month low of 0.7 per cent in May from an upwardly revised figure of 1 per cent in April, with half the sectors clocking sharp contractions. Electricity generation contracted for the first time in nine months, with a 5.8 per cent drop that marked the sharpest downturn since June 2020. Crude oil output dipped 1.8 per cent, shrinking for the fifth straight month. Fertilisers production contracted for the second month in a row, with May's 5.9 per cent drop being the sharpest since February 2024, while natural gas output (-3.6 per cent) shrank for the 11th successive month. On the positive side, growth in cement production accelerated to 9.2 per cent in May, recovering from April's six-month low uptick of 6.3 per cent. Steel output also picked up pace and grew 6.7 per cent during the month, compared to a revised 4.4 per cent uptick recorded in April, which was the weakest in seven months. 'Clearly, the pick-up in infrastructure activity has aided steel production. Demand from construction and auto besides capital goods would account for this increase. Cement too did very well, which is reflective of the government activity in the capex space,' said Bank of Baroda chief economist Madan Sabnavis. Coal production growth decelerated a tad to 2.8 per cent from 3.5 per cent in April, while refinery products output grew 1.1 per cent in May after a 4.5 per cent contraction in the previous month. The eight core sectors constitute 40.27 per cent of the Index of Industrial Production (IIP), which had fallen to an eight-month low of 2.7 per cent in April from an upward revised figure of 3.94 per cent in March. Economists now expect industrial output growth to drop to 1.5 - 2 per cent in May. Base effects also affected last month's growth print, as the Index of Core Industries (ICI) had risen 6.9 per cent in May 2024, which was the highest in the past 13 months. 'Excess rains in the latter part of May 2025, owing to the early onset of the monsoon, likely weighed on the performance of the electricity and some of the mining sectors in the month. However, the YoY performance of the steel, cement, refinery products and crude oil sectors improved in May 2025 vis-à-vis April 2025, partly offsetting the deterioration in the performance of the other sectors,' said Rahul Agrawal, senior economist, ICRA Ratings.
Business Standard
12-06-2025
- Business
- Business Standard
Spandana Sphoorty Financial receives downgrade in credit ratings
From ICRA RatingsSpandana Sphoorty Financial announced that ICRA Ratings has downgraded rating to A- (Negative), for existing instruments of the Company as detailed below: Long term fund based - Term loan (Rs 2105 crore) - ICRA A- (Negative); downgraded from ICRA A (Negative)Non convertible debentures (Rs 423 crore) - ICRA A- (Negative); downgraded from ICRA A (Negative)Powered by Capital Market - Live News
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Business Standard
14-05-2025
- Business
- Business Standard
WPI inflation falls to 13-month low in April as food, fuel become cheaper
Inflation based on the wholesale price index (WPI) declined to a 13-month low of 0.85 per cent in April from 2.05 per cent in March, on the back of a dip in the prices of food and fuel and power. Price rise also decelerated in the manufactured products category, according to data released by the Ministry of Commerce and Industry on Wednesday. Prices of primary food articles witnessed a deflation after 27 months (of -0.86 per cent). The trend was led by the sharpest declines in the prices of vegetables (-18.26 per cent) since October 2023 and pulses (-5.6 per cent) since October 2018. Potato prices declined 24.3 per cent. Protein-rich food like eggs, meat and fish declined by 0.29 per cent – the first time it happened so since October 2024. Onion price increased 0.2 per cent in April, the slowest in 22 months. Price rise for other food items like paddy (1.87 per cent), cereals (3.81 per cent), fruits (8.38 per cent) and wheat (7.41 per cent) decelerated, too. Easing food inflation is expected to give relief to households and help consumption demand in FY25. Rahul Agrawal, senior economist at ICRA Ratings, said that WPI inflation is expected to soften further in May, aided by a favourable base and trends in wholesale prices of essential food items. Fuel and power prices declined by 2.2 per cent in April. Deceleration in global commodity prices, especially of mineral oils, led to a decline in the prices of kerosene, air turbine fuel and petrol. The prices of petrol (-7.7 per cent) and high speed diesel (-5.04 per cent) declined for the 11th and 24th month straight. Cooking gas price dipped (-0.41 per cent) for the first time since April 2024. Among manufactured products, prices of cement, lime and plaster continued in deflation (-1.42 per cent) for the 16th month straight. Prices of basic metals dipped (-0.64 per cent). The price rise of other major manufactured goods like textiles (0.52 per cent), apparel (0.65 per cent), paper and paper products (2.1 per cent), pharmaceuticals (0.98 per cent), semi-furnished steel (0.25 per cent) and food products (9.51 per cent) decelerated in April. However, the price rise for manufactured vegetable and animal oils, despite deceleration remained in double digit (28.7 per cent) during April. ALSO READ: Paras Jasrai, associate director at India Ratings and Research, said that the decline in manufactured products' prices was broad based as core inflation moderated after increasing for six months. Manufactured products' prices were at a three-month low of 1.3 per cent in April as base metal prices declined. 'The temporary lowering of tariffs by the US and China helps in controlling the heightened uncertainty and volatility. Muted commodity prices along with a favorable base effect for the food segment would keep the wholesale inflation around 0.5 per cent in the near term,' he said. The drop in WPI inflation comes a day after India's retail inflation moderated to nearly six-year low of 3.16 per cent, aided by a double-digit dip in vegetable prices and the deepest decline in pulses prices in over six years. 'This dual disinflation offers a substantial macroeconomic tailwind, with the pricing environment favorable for rural consumption recovery. This strengthens the case for future rate cuts - a move that will lower borrowing costs, revive capex appetite among corporates and offer rate sensitive sectors a timely boost,' said Mahendra Patil, managing partner, MP Financial Services.
