India's wholesale inflation moderates further to fall below 5 pc
Jan 16, 2023
New Delhi [India], January 16 : India's wholesale inflation based on the Wholesale Price Index for the month of December 2022 was at 4.95 per cent (provisional), against the previous month's 5.89 per cent, official data showed on Monday.
In October, it was at 8.39 and has been falling since then. Notably, the wholesale price index (WPI)-based inflation had been in double digits for 18 months in a row till September.
The decline in wholesale inflation in December was primarily due to a fall in prices of food articles, mineral oils, crude petroleum and natural gas, food products, textiles and chemicals and chemical products, said the Ministry of Commerce and Industry while releasing the inflation data.
Meanwhile, India's retail inflation during the month of December was at 5.72 per cent, data released last week showed. The latest figures showed a marginal decline and further moderation in retail inflation as compared with the previous month.
India's retail inflation rate based on Consumer Price Index was 5.88 per cent in November from 6.77 per cent in October. Retail inflation in India had remained above 6 per cent till October for over three quarters, which was beyond RBI's comfort zone.
RBI, in its fight against rising inflation, had already hiked the key policy rate by 225 basis points since May to 6.25 per cent to cool off domestic retail inflation that stayed above its upper tolerance limit for nearly three quarters.
Raising interest rates typically cools demand in the economy, thereby putting a brake on inflation.
The latest hike was on December 7 last year, when the Monetary Policy Committee (MPC) of the RBI increased the policy repo rate by 35 basis points, besides deciding to remain focused on the "withdrawal of accommodation" of monetary policy to ensure that inflation remains within the target going forward while supporting economic growth.
The next three-day RBI monetary policy meeting is scheduled for February 6-8.
