For the fourth consecutive month, wholesale inflation was negative in July

With a fall of -1.36% in July, wholesale inflation continued its downward trend for a fourth consecutive month. Although the price of food has risen, the continuous deflation may be linked to the steady decline in gasoline costs.

Since April, the wholesale price index (WPI), which measures inflation, has been continually in the negative territory, hitting a low of -4.12% in June. In July of last year, it had risen as high as 14.07%.

 

Contrarily, compared to the 1.32% reported in June, the inflation rate for food items has increased significantly in July, by a whopping 14.2%.

 

The decline in July’s inflation rate, according to the Ministry of Commerce and Industry, may be largely due to price decreases in mineral oils, basic metals, chemicals and chemical products, textiles, and food items.

 

In the gasoline and electricity sector, the inflation rate decreased slightly from -12.63% in June to -12.79% in July.

 

The inflation rate for manufactured goods was -2.51%, a little increase from the -2.71% seen in June.

 

The Reserve Bank of India (RBI) made the decision to keep interest rates at 6.5% for a third straight meeting. However, it made a suggestion that tighter monetary policy may be implemented if rising food prices cause inflation to increase.

 

Shaktikanta Das, governor of the RBI, highlighted that efforts to reduce inflation are still underway. He emphasized the continuous dangers brought on by shifting food and energy costs globally, ongoing geopolitical conflicts, and unpredictable weather patterns.

 

The RBI increased the pressure from increasing food costs in its revision of its inflation forecast for the current fiscal year, which ends in March 2024, from 5.1% to 5.4%.

 

The central bank uses the retail or consumer price index-based inflation to formulate its policies. Later today is anticipated to see the publication of data for retail inflation in July.