India's Wholesale Inflation Jumps To 6-Month High Of -0.26 Per Cent In September

WPI inflation stood at -0.52 percent in August 2023 and 10.55 per cent in September 2022

The WPI data comes days after the NSO on Thursday revealed that headline retail inflation decilined to a three-month low of 5.02 per cent in September.

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India's wholesale price index (WPI) inflation remained in the deflationary zone for the sixth month in a row in September at -0.26 per cent, data released on Monday by the commerce ministry stated. WPI inflation stood at -0.52 percent in August 2023 and 10.55 per cent in September 2022. The WPI-based inflation rate has been in the negative for the sixth consecutive month since April.

At -0.26 per cent, the latest wholesale inflation print is well below the consensus estimate, with economists having predicted it likely rose to 0.7 per cent last month.

The Index for this major group declined by 3.80 per cent to 182.4 (provisional) in September, 2023 from 189.6 (provisional) in August, 2023. Prices of Crude Petroleum & Natural Gas (10.31 per cent) and Non-food Articles (0.86 per cent) increased in September, 2023 as compared to August, 2023. Prices of Minerals (-4.92 per cent) and Food Articles (-6.46 per cent) declined in September, 2023 as compared to August, 2023.

The wholesale inflation for primary articles in September stood at 3.7 per cent as against 6.34 per cent in August. Fuel and power inflation for September came -3.35 per cent, compared to -6.03 per cent in August. Food index for the month of September eased to 1.54 per cent from 5.62 per cent in August. "Deflation in September 2023 is primarily due to fall in prices of chemical & chemical products, mineral oils, textiles, basic metals and food products as compared to the corresponding month of the previous year," the commerce and industry ministry said on Monday.

The WPI data comes days after the NSO on Thursday revealed that headline retail inflation decilined to a three-month low of 5.02 per cent in September, dropping by a massive 242 basis points from July's 15-month high of 7.44 per cent. Over the same period, WPI inflation has risen by 97 basis points.

The inflation has come back to the Reserve Bank of India (RBI)'s comfort level of below 6 per cent after a gap of two months. It was at 7.56 per cent in September 2022. Food inflation fell to 6.56 per cent in September against 9.67 per cent in August. The RBI's latest forecasts, released on October 6 MPC, had implied an inflation reading of 4.8-5 per cent for last month.