New Delhi, August 14: Wholesale price-based inflation has maintained its negative trajectory for the fourth consecutive month in July, standing at (-)1.36%, attributed to a decrease in fuel prices despite a rise in the cost of food articles.
The wholesale price index (WPI)-based inflation has sustained a negative trend since April and was recorded at (-)4.12% in June, a notable decline from the 14.07% in the same period the previous year.
In July, inflation in food articles experienced a significant surge of 14.25% compared to 1.32% in June.
The Ministry of Commerce and Industry stated on Monday that the drop in the inflation rate in July 2023 can be largely attributed to decreased prices in mineral oils, basic metals, chemicals and chemical products, textiles, and food products.
Fuel and power basket inflation slightly eased to (-)12.79% in July from the (-)12.63% recorded in June.
Within the manufactured products category, the inflation rate was recorded at (-)2.51%, showing a marginal decrease from the (-)2.71% in June.
In the past week, the Reserve Bank of India (RBI) maintained the interest rates at 6.5% for the third consecutive meeting. However, it hinted at potential tighter policies if food prices drive up inflation.
RBI Governor Shaktikanta Das expressed, “The task of managing inflation is still ongoing. Inflation risks persist due to unpredictable global food and energy prices, ongoing geopolitical tensions, and weather-related uncertainties.”
For the current financial year, ending in March 2024, the RBI increased its inflation projection from 5.1% to 5.4%, citing pressure from rising food prices.
It’s important to note that the central bank takes into consideration retail or consumer price index-based inflation for shaping monetary policies. The retail inflation data for July is scheduled to be released later in the day.
