WPI inflation slips to 34-month low
Deflation: Wholesale prices at (-) 0.92% in April as softening global commodity prices pull down food, fuel, and other input costs
image for illustrative purpose
- Global commodity prices softening
- Input costs for producers down
- Wholesale inflation falling for last 11 months
Negative WPI inflation, technically termed as deflation, means that overall wholesale prices have been falling year-on-year
New Delhi: Wholesale prices in India fell for the first time in almost three years in April, as softening global commodity prices brought down food, fuel, and other input costs for producers. WPI inflation has been on a declining trend for the last 11 months and came in at (-) 0.92 per cent in April. This is the lowest level of wholesale price index (WPI) since June 2020, when inflation was at (-) 1.81 per cent. A negative WPI inflation, technically termed as deflation, means that overall wholesale prices have been falling year-on-year. The high base at 15.38 per cent in April 2022, also contributed to the decline in wholesale inflation in April this year.
"Decline in the rate of inflation in April, 2023 is primarily contributed by fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products and paper & paper products,” the commerce and industry ministry said on Monday.
CareEdge Ratings Chief Economist Rajani Sinha said the deflationary trend is expected to continue for the next 2-3 months with the full-year WPI inflation averaging in the range of 1-2 per cent. "A lower WPI print could help in pulling retail inflation down with its lagged impact on the core CPI inflation," Sinha said.
WPI inflation was at 1.34 per cent in March. April also saw easing in prices across commodities -- food, non-food, fuel and power, and manufactured items. Inflation in food articles eased to 3.54 per cent in April, against 5.48 per cent in March. In the food articles category, prices of cereals, wheat, fruits, milk and egg, meat and fish declined over the previous month. Inflation in vegetables was (-) 1.50 per cent, potato (-) 18.66 per cent, onion (-)18.41 per cent and wheat was at 7.27 per cent in April 2023.
Fuel and power basket inflation eased to 0.93 per cent in April from 8.96 per cent in March.
