Wholesale Inflation Eases To 0.27 Per Cent In January

The WPI inflation had been in the negative territory from April to October but turned positive in November, registering at 0.39 per cent

In January 2024, the Wholesale Price Index (WPI)-based inflation saw a notable decline, settling at 0.27 per cent. This drop can be primarily attributed to the moderation in prices of food items. This figure marks a significant decrease from the 0.73 per cent recorded in December 2023. The WPI inflation had been in the negative territory from April to October but turned positive in November, registering at 0.39 per cent. The wholesale food inflation eased to 3.79 per cent in January from  5.39 per cent in December last year. 

According to the statement released by the Ministry of Commerce and Industry on Wednesday, the annual inflation rate based on the All India Wholesale Price Index for January 2024 stands at 0.27 per cent (provisional), compared to the corresponding period in January 2023.

Data further reveals that food inflation saw a notable decline, standing at 6.85 per cent in January compared to 9.38 per cent in December 2023. Within this category, inflation in vegetables experienced a decrease from 26.3 per cent in December to 19.71 per cent in January. Similarly, the WPI inflation for pulses stood at 16.06 per cent in January, whereas for fruits, it was recorded at 1.01 per cent.

Comparatively, in January 2023, wholesale inflation stood at 4.8 per cent. These fluctuations in wholesale prices indicate the dynamic nature of the market, with various factors influencing price trends, particularly in essential commodities.

Retail inflation also has moderated to 5.10 per cent in January, marking a three-month low compared to December's 5.69 per cent. As per the National Statistical Office (NSO) latest data, food and beverage inflation stood at 8.3 per cent in January, down from 8.70 per cent in the preceding month. Notably, in August 2023, inflation peaked at 6.83 per cent.

In its recent Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) projected retail inflation for the fiscal year 2023-24 at 5.4 per cent. The projection for the current quarter (Q4) was revised downwards to 5 percent from the earlier estimate of 5.2 per cent. Looking ahead to FY25, the inflation projection remains unchanged at 4.5 per cent, with quarterly forecasts as follows: Q1 at 5 per cent, Q2 at 4 per cent, Q3 at 4.6 per cent, and Q4 at 4.7 per cent.

The government has mandated the RBI to maintain retail inflation at 4 per cent with a tolerance band of 2 per cent on either side.