WPI Inflation Drops 1% For March, Hints At Demand Slowdown

The wholesale inflation measured in terms of the WPI index came down due to the weakening of prices of fuel, power, and food.

(PTI)

New Delhi:  With the country under the grip of Covid-19 pandemic and economic activities coming to halt, the wholesale price inflation dropped to just 1 per cent for the month of March compared to 2.26 per cent in February, according to government data. The dip in wholesale  price index (WPI) points out at the falling demand amid the Covid-19 lockdown which has been extended to May 3. The wholesale inflation measured in terms of the WPI index came down due to the weakening of prices of fuel, power and food. Inflation in vegetables fell to 11.90 per cent in March from 29.97 per cent in the previous month. Food prices for the month of March cooled off to 5.49 per cent compared to 7.31 per cent in the previous month. For food articles, it fell to 4.91 per cent as compared to 7.79 per cent in February.  WPI fuel and power inflation stood at -1.76 per cent in March against 3.38 per cent in February. Retail inflation measured as consumer price index (CPI) also took a dip to 5.91 per cent for March reflecting weak demand as people are not spending under the lockdown.  It may further worsen in the next few months especially in April with the extension in lockdown. However, RBI doesn't consider wholesale price inflation for altering monetary policy while lower levels of retail inflation and slowdown in growth may be others reasons for the policy rate cut.

The MHA said in its directive,'to mitigate hardship to the public, select additional activities have been allowed which will come into effect from 20 April, 2020.'

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