Wholesale Inflation Stays in Negative Zone for 4th Month in July 2023, Contracts 1.36%

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Decline in the rate of wholesale inflation in July 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products

The wholesale price-based inflation remained in the negative territory for the fourth straight month in July at (-)1.36 per cent on easing prices of fuel, even though food articles turned costlier. The wholesale price index (WPI) based inflation rate has been in the negative since April and was (-)4.12 per cent in June. In July last year it was 14.07 per cent.

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Inflation in food articles skyrocketed 14.25 per cent in July against 1.32 per cent in June.

“Decline in the rate of inflation in July 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products,” the commerce and industry ministry said on Monday.

Fuel and power basket inflation eased to (-)12.79 per cent in July from (-)12.63 per cent in June.

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In manufactured products, the inflation rate was (-)2.51 per cent as against (-)2.71 per cent in June.

The RBI last week kept interest rates unchanged at 6.5 per cent for the third straight meeting but signalled tighter policy if food prices drive inflation higher.

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“The job on inflation is still not done,” RBI Governor Shaktikanta Das had said. “Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather-related uncertainties.” The RBI raised its inflation forecast for the current financial year ending March 2024 to 5.4 per cent from 5.1 per cent earlier, citing pressures from food prices.

The central bank takes into account retail or consumer price index-based inflation for formulating monetary policy. Retail inflation data for July is scheduled to be released later in the day.