WPI inflation falls to 7-yr low
Drop in fuel, mfg goods pulls down wholesale price index-based inflation rate to -3.48% in May; WPI in the negative zone for second straight month
New Delhi Wholesale price-based inflation rate fell to a seven-and-a-half-year low of (-) 3.48 per cent in May on easing prices of food, fuel and manufactured items, strengthening the case for continuing with the pause in rate hike in the coming months of the current fiscal. This is the second straight month when WPI has been in the negative zone mainly on account of a higher base and falling prices of fuel and manufactured goods. Food prices also eased during May.
In May, 2022 WPI inflation was at 16.63 per cent. Last month, it was (-) 0.92 per cent. Although the RBI tracks consumer price index (CPI), the decline in wholesale price index (WPI) based inflation rate will be reflected in the retail inflation with a time lag. The deceleration in WPI comes in line with the easing of May retail inflation, which came in at 25-month low of 4.25 per cent.
“Decline in the rate of inflation in May 2023 is primarily contributed by fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum & natural gas, and chemical & chemical products,” the commerce and industry ministry said on Wednesday.
