Wholesale inflation in India remained in negative territory for the sixth consecutive month in September, according to official data released on Monday. This negative trend began in April of this year and was also observed during the onset of the Covid pandemic in July 2020 when the Wholesale Price Index (WPI) recorded negative figures.
In September, wholesale inflation stood at -0.26%, an improvement from the -0.52% in August and the -1.23% in July, as reported by the Ministry of Commerce and Industry. This deflationary trend is primarily attributed to lower prices in chemical and chemical products, mineral oils, textiles, basic metals, and food products compared to the corresponding month in the previous year.
On October 12, the statistics ministry announced that headline retail inflation had reached a three-month low of 5.02% in September. However, it should be noted that this level is still higher than the ideal inflation scenario of 4%. The government regularly releases wholesale price index numbers on the 14th of each month, compiling data from various sources across the country.
In October 2022, overall wholesale inflation stood at 8.39% but has been progressively decreasing since then. It is worth mentioning that wholesale price index-based inflation had been in double digits for 18 consecutive months until September of the previous year.
Meanwhile, retail inflation in India has returned to the Reserve Bank of India’s comfort level of 2-6% in September but remains above the ideal 4% target. Retail inflation for September was reported at 5.02%. In the fight against inflation, the RBI has raised the repo rate by a total of 250 basis points since May 2022, except for recent pauses. Increasing interest rates is a common monetary policy tool used to curb demand and ultimately reduce the inflation rate.
(With text input from ANI)
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