WPI inflation for August hits 5 year low; drops to 3.74 per cent

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 WPI inflation for August hits 5 year low; drops to 3.74 per cent
WPI Inflation in India dropped to a 5 year low of 3.74 per cent for the month of August in a sign that inflation in the economy has begun to ease. Inflation for the month of July 2014 was placed at 5.19 per cent and the drop for August was rather sharp.

Th food articles index was up 2.6 per cent, month on month, while the primary articles index was up 2 per cent. Food inflation was at the lowest level since Jan 2012.

Manufactured products inflation also showed a decline to 3.45 per cent vs 3.67 per cent, month on month.

Today's sharp decline in inflation raises the prospects of the Reserve Bank of India cutting interest rates going forward. Crude oil prices have also cooled-off, which should further ease inflation in the coming months.

The RBI has maintained a hawkish tone in the past with regards to inflation and today's WPI inflation figures should once again re-ignite hopes of a interest rate cut.

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Read more about: wpi inflation, rbi, food inflation
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