Wholesale inflation remains negative for the 6th month at -0.26% in September

Inflation for food fell to 3.35 per cent. in September. (representative)

New Delhi:

Wholesale inflation remained in negative territory for the sixth consecutive month in September at (-) 0.26 percent due to easing food prices, especially vegetables.

The wholesale price index (WPI)-based inflation rate has been 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 a faster decline in food prices.

Inflation in food items eased to 3.35 percent in September, after being in double digits in the previous two months. It was 10.60 per cent. in August.

For vegetables, inflation was (-)15 per cent. against 48.39 per cent. in August. For potatoes, it was (-)25.24 per cent. in September against (-)24.02 per cent. the month before.

However, some hardening of inflation was seen in food items such as pulses, onions, milk and fruits during September.

Inflation in pulses was 17.69 per cent, while in onions it was the highest at 55.05 per cent. during the month.

The inflation of the fuel and power curve was (-)3.35 per cent. in September against (-)6.03 per cent. in August.

For industrial goods, inflation was (-)1.34 per cent. against (-)2.37 per cent. in August.

“Deflation in September 2023 is primarily due to declines in prices of chemical and chemical products, mineral oils, textiles, base metals and food compared to the corresponding month in the previous year,” the Ministry of Trade and Industry said on Monday.

Barclays MD & Head of EM Asia Economics Rahul Bajoria said the waning momentum in core inflation and the fall in vegetable prices are driving the moderation in retail inflation. But the sequential rise in WPI for manufactured goods bears watching if manufacturers pass on higher costs to retail prices.

“Currently, firm surveys show that the pace of increase in sales prices is lower than that of input prices (as seen in manufacturing and services PMIs and RBI’s industrial outlook survey). We expect the RBI to remain on a longer pause as it monitors uncertainty on the commodity front, both in domestic non-perishable food and international energy prices,” Bajoria said.

Data released last week showed annual retail or consumer price inflation at 5.02 percent in September, a 3-month low.

Earlier this month, the RBI forecast CPI inflation to be 5.4 percent for 2023-24. The central bank kept the key interest rate on hold for the fourth meeting in a row to decide monetary policy, as it aims to keep inflation within the target band of 2-6 per cent.

(With the exception of the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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