Wholesale Inflation Hits 14-Month Low Amid Price Easing
Wholesale price inflation dropped to 0.39% in May, marking a 14-month low, driven by falling food and fuel prices. However, geopolitical tensions and rising crude oil costs could increase prices. The Reserve Bank of India cut interest rates due to subdued retail inflation, projected at 3.7% for the fiscal year.
- Country:
- India
In May, India's wholesale price inflation (WPI) fell to a 14-month low of 0.39%, primarily due to reduced food and fuel prices, according to the latest data. Compared to the previous month, when it stood at 0.85%, and last year's 2.74% in May, the decline marks a significant easing of inflationary pressures.
The industry ministry attributed the positive inflation in May to increased prices of manufactured food products, electricity, chemicals, other manufacturing, non-food articles, and transport equipment. Despite deflation in food articles and fuel, manufactured goods recorded an inflation of 2.04%, albeit lower than April's 2.62%.
Amid reduced retail inflation rates, the Reserve Bank of India (RBI) slashed the benchmark policy interest rate by 0.50% to 5.50% this month. Meanwhile, geopolitical tensions, coupled with rising crude oil prices and a slowing monsoon, could trigger a price surge, potentially affecting the WPI inflation in the future. Industry leaders anticipate that the downtrend in wholesale inflation could foster a positive environment for business growth by cutting production costs.
(With inputs from agencies.)
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