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regular-article-logo Thursday, 30 May 2024

Wholesale inflation declines 0.3 per cent in September amid easing of food prices

The wholesale price index (WPI)-based inflation rate has been negative since April. In September last year, it was 10.55 per cent

Our Special Correspondent Mumbai Published 17.10.23, 11:19 AM
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Wholesale inflation remained in the negative zone for the sixth straight month in September at (-) 0.26 per cent on the easing of food prices.

The sequential data, however, showed that deflation is down from 0.52 per cent in August.

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The wholesale price index (WPI)-based inflation rate has been negative since April. In September last year, it was 10.55 per cent.

Experts said the continued deflation in WPI in year-on-year terms was mostly because of a 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 vegetables, inflation was (-)15 per cent against 48.39 per cent in August. In potatoes, it was (-)25.24 per cent against (-)24.02 per cent in the previous month.

However, some hardening in inflation was seen in food items such as pulses, onions, milk and fruits. Inflation in pulses was 17.69 per cent, while in onion it was at a high of 55.05 per cent during the month.

Rajani Sinha, chief economist with CareEdge Ratings, said the decline in WPI can be attributed to a substantial deceleration in food prices and the continued contraction in fuel prices and manufactured products prices.

“The WPI deflation averaged 0.7 per cent in the second quarter of the fiscal against 2.9 per cent in the first quarter. The decline in input prices even in the second quarter compared with last year would provide much-needed support to the corporates in maintaining their margins,” Sunil Kumar Sinha (senior director and principal economist) at India Ratings and Research said.

He said, “The eruption of the West Asian conflict besides the ongoing Russia- Ukraine conflict has made the global geopolitical situation more volatile. We expect WPI to turn to an inflation of around 0.5 per cent in October 2023.”

Aditi Nayar, chief economist, Icra, said: “The year-on-year deflation in global commodity prices has widened in October 2023 so far vis-à-vis September, even as the year-on-year prints for most food items have hardened, relative to the prior month.”

“We expect WPI deflation to widen slightly in October, remaining in the deflationary zone for the seventh.”

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