NEW DELHI, Oct 16: The Wholesale Price Index (WPI) in India has sustained its negative trend for the sixth consecutive month as of September, according to official data. This deflationary figure stands at -0.26%, marking a noteworthy improvement from the -0.52% recorded in August and the -1.23% in July. The ongoing deflation is primarily attributed to price reductions in various sectors, including chemical products, mineral oils, textiles, basic metals, and food products, in comparison to the corresponding month of the previous year.
This decline in the Wholesale Price Index follows the recent announcement by the statistics ministry that headline retail inflation reached a three-month low of 5.02% in September. The government routinely publishes wholesale price index figures on the 14th of each month (or the next working day). These figures are compiled from data provided by institutional sources and selected manufacturing units across the country.
It’s worth noting that wholesale inflation, which stood at 8.39% in October 2022, has been on a downward trajectory since then. It’s a significant departure from the previous trend when the Wholesale Price Index-based inflation remained in double digits for a consecutive 18-month period until September of the previous year.
In contrast, retail inflation in India, while back within the Reserve Bank of India’s comfort level of 2-6% in September, remains slightly above the ideal 4% scenario, standing at 5.02% for the same month.
Notably, barring a few recent pauses, the Reserve Bank of India (RBI) has cumulatively raised the repo rate by 250 basis points since May 2022 in an effort to combat inflation. Increasing interest rates is a monetary policy tool typically employed to reduce demand within the economy, thereby helping to lower the inflation rate.
