India: Wholesale inflation remains in negative zone

This is the fourth consecutive month of negative wholesale price index (WPI)-based inflation.

The month-over-month change in WPI index for the month of July, 2023 stood at 1.95% as compared to June, 2023.

"Decline in the rate of inflation in July, 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products," the official press release said.

The latest data showed food articles inflation surged to 14.25% as compared to 1.32% in June this year. Fuel & power inflation eased to (-)12.79% in July 2023 from (-)12.36% in June. Manufactured products inflation stood at (-) 2.51% in July 2023 as against (-)2.71 in the previous month.

With global commodity prices seen rising sequentially and base effect fading, the WPI inflation is expected to rise in coming months gradually from the record low level registered in June this year even though it remains in contractionary mode.

The WPI captures the average movement of wholesale prices of goods and is primarily used as a GDP deflator. It reckons only basic prices and does not include taxes, rebate/trade discounts, transport and other charges.

The Reserve Bank of India (RBI) tracks retail inflation while reviewing its bi-monthly monetary policy.

(With UNI inputs)