India's wholesale price inflation (WPI) stood at -3.48 per cent in May, data released on Monday by the commerce ministry showed. This is the fourth month in a row in July WPI stayed in deflationary zone, though the numbers rose to a three-month high of –1.36 per cent. In June, the WPI inflation was recorded at -4.12 per cent. The lowest wholesale inflation was recorded at –4.76 per cent in October 2015.
According to the release, the inflation in primary articles was considerably higher at 7.57 per cent as compared to July last year. As compared to June 2023, the inflation in this category was 8.05 per cent.
"The food index consisting of 'Food Articles' from the primary articles group and 'Food Product' from the manufactured products group has increased from 175.2 in June 2023 to 187.7 in July 2023. The annual rate of inflation based on the WPI Food Index increased from –1.24 per cent in June 2023 to 7.75 per cent in July 2023," the government’s release said.
In the fuel and power category, the WPI-based inflation was -12.79 per cent year-on-year (YoY). Sequentially, it was –0.48 per cent. In the manufactured products category, the YoY change in wholesale inflation was –2.51 per cent. As compared to June this year, the inflation in this category was –0.29 per cent.
The RBI last week kept interest rates unchanged at 6.5 per cent for the third straight meeting but signalled tighter policy if food prices drive inflation higher. "The job on inflation is still not done," RBI Governor Shaktikanta Das had said. "Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather-related uncertainties." The RBI raised its inflation forecast for the current financial year ending March 2024 to 5.4 per cent from 5.1 per cent earlier, citing pressures from food prices.
The central bank takes into account retail or consumer price index based inflation for formulating monetary policy. Retail inflation data for July is scheduled to be released later in the day.