India’s wholesale inflation remains in negative zone for third month
Jul 14, 2023
New Delhi [India], July 14 : Wholesale inflation in India based on the Wholesale Price Index continued to stay in the negative zone for the third straight month in June, besides hitting a fresh multi-year low.
The June wholesale inflation came in at (-) 4.12 per cent against (-) 3.48 per cent in May, as against minus 0.79 the previous month (April), official data released by the Ministry of Commerce and Industry showed on Friday.
The decline in the rate of wholesale inflation in June is primarily due to a fall in prices of mineral oils, some food products, basic metals, crude petroleum and natural gas and textiles, the ministry said in a statement.
The government releases index numbers of wholesale prices on a monthly basis on the 14th of every month (or the next working day). The index numbers are compiled with data received from institutional sources and selected manufacturing units across the country.
Wholesale inflation has been easing and in March it was at 1.34 per cent against 3.85 per cent in February.
Overall wholesale inflation was 8.39 per cent in October and has fallen since then. Notably, the wholesale price index (WPI)-based inflation had been in double digits for 18 months in a row till September.
Meanwhile, bucking the trend, retail inflation in India rose considerably in June to 4.81 per cent, largely due to a sharp spurt in vegetable prices. Vegetables, meat and fish; eggs; pulses and products; spices indices saw an uptick.
The rise in inflation could partly be attributed to the current spurt in tomato prices across India. The rise in tomato prices is reported across the country, and not just limited to a particular region or geography. In key cities, it rose to as high as Rs 150-200 per kg.
Back in May, the retail inflation (final) was at 4.31 per cent, hitting a two-year low. It was at 4.7 per cent in April and 5.7 per cent the previous month.
SBI Research, in its latest 'Ecowrap' report, authored by SBI’s Group Chief Economic Adviser Soumya Kanti Ghosh, however, noted that a continued vigil on the evolving inflation outlook is warranted given the erratic progress of monsoon and its impact on Kharif crop sowing, and subsequently on overall food inflation.
Farmers in India have started sowing their Kharif crops. Paddy, moong, bajra, maize, groundnut, soybean, and cotton are some of the major Kharif crops.
