According to government data released on Tuesday, the inflation rate based on the Wholesale Price Index (WPI) fell to a 24-month low of 4.73 percent in January 2023. The easing prices of manufactured goods, fuel, and electricity, among other things, are mostly to blame for the decrease in the rate of WPI inflation last month.
From 0.65 percent in December, the inflation rate for the food index increased to 2.95 percent in January.The WPI-based measure of inflation has decreased for eight consecutive months. The percentage was 4.95 in December 2022, 5.85 in November of previous year, and 13.68 in January 2022.
The Commerce and Industry Ministry stated in a statement that mineral oils, chemicals and chemical products, textiles, crude petroleum and natural gas, textiles, and food products were the main contributors to the decrease in the rate of inflation in January 2023.
Pulses had 2.41 percent inflation, whereas vegetables saw (-) 26.48 percent inflation. Last month, oil seed inflation was (-) 4.22 percent.
From 18.09% in December of last year, the inflation rate for the fuel and power basket decreased to 15.15% today. In manufactured goods, it was 2.99% in January 2023 compared to 3.37% in December of the previous year.
A day after the Central government issued the headline retail inflation figures, the WPI data was released.Due to increased food costs, India’s annual retail inflation in January above the Reserve Bank of India’s upper threshold for the first time in three months, supporting the hawkish monetary policy position from the previous week.
According to government data issued earlier on Monday, the country’s annual retail inflation rate increased to 6.52% in January from 5.72% in December.
According to a Reuters survey of 44 analysts, retail inflation in January exceeded the RBI’s upper targeted level of 6% for the first time since October and was significantly higher than the 5.9% prediction.
In the meantime, the central bank increased policy rates by 25 basis points to 6.50 percent in its monetary policy review last week, noting that core inflation continues to be sticky.
The central bank revised its earlier prediction of 6.8% inflation for the current fiscal year to 6.5 percent in 2022–2023 by assuming an average crude oil price (Indian basket) of $95 per barrel. The RBI anticipates that retail inflation will be 5.7% on average for the January-March quarter.
