WPI inflation remains in negative territory in May, contracts 3.48%

Wholesale price index-based inflation (WPI) came down to -3.48 per cent in May 2023 compared to -0.98 per cent in April. Decline in rate of inflation can be attributed to a fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum and natural gas, and chemical and chemical products, as per a Ministry of Commerce and Industry release. 

WPI food inflation fell from 0.17 per cent in April to -1.59 per cent in May. Items such as paddy (7.33 per cent), cereals (6.89 per cent), milk (6.83 per cent), wheat (6.15 per cent), and pulses (5.76 per cent) were among key contributors to the recent rate of WPI food inflation. 

Other food items that saw a revision in inflation are vegetables (-20.71 per cent), potato (-18.71 per cent), onion (-7.25 per cent), and fruits (1.95 per cent). 

Moreover, fuel and power inflation fell massively from 0.93 per cent in April to -9.17 per cent in May. Edible oils inflation and manufactured products inflation stood at -29.54 per cent and -2.97 per cent in May respectively.

Meanwhile, the consumer price inflation in India in the same period went down to a 25-month low of 4.25 per cent, closer to the Reserve Bank of India’s (RBI) medium-term target of 4 per cent. The government has asked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

In its recent monetary policy, the RBI marginally slashed its inflation projectiosn for FY24 from 5.2 per cent to 5.1 per cent. The RBI MPC predicted inflation for Q1 at 4.6 per cent, Q2 at 5.2 per cent, Q3 at 5.4 per cent, and Q4 at 5.2 per cent. 

Also Read: Cyclone Biparjoy: IMD issues red alert; 37,000 evacuated from coastal areas; CM Bhupendra Patel holds emergency meet

Also Watch: Forbes Global 2000 list for 2023: Mukesh Ambani-led RIL tops India Inc, Gautam Adani's firms make the cut, LIC’s debut