Wholesale inflation negative for 6th month
Wholesale price index-based inflation contracted 0.26% in Sept owing to easing prices food products; Experts see WPI inflation rising in second half this fiscal
New Delhi: Wholesale inflation remained in the negative territory for the sixth straight month in September at (-) 0.26 per cent on easing prices of food items, especially vegetables. The wholesale price index (WPI)-based inflation rate has been in the negative since April and was (-)0.52 per cent in August. In September last year, it was 10.55 per cent.
Experts said the continued deflation in WPI in year-on-year terms was mostly due to faster decline in food prices. Inflation in food articles eased to 3.35 per cent in September, after remaining in double digits in the previous two months. It was 10.60 per cent in August.
“In September, the WPI exhibited its sixth consecutive month of contraction, with a decline of 0.3 per cent year-on-year (y-o-y), lower than the previous month’s contraction of 0.5 per cent,” said Rajani Sinha, chief economist at CareEdge.
“The continued contraction in WPI can be attributed to the deceleration in food prices, as well as the ongoing decline in fuel and manufactured product prices,” Sinha said.
Abhirup Sarkar, an economist and professor at the Indian Institute of Statistics, said that “while the decrease in fuel prices is positive news, geopolitical conflicts in Russia and the Middle East could lead to an increase in international oil prices, affecting wholesale price inflation in India. Although wholesale food prices have seen a decline, it may take time for this to be reflected in retail prices, as it depends on traders and their ability to pass on the price reduction to consumers.” In vegetables, inflation was (-)15 per cent, as against 48.39 per cent in August.
