FILE PHOTO: A woman selects tomatoes from a vegetable vendor, at a wholesale market in Navi Mumbai, India August 4, 2023. REUTERS/Francis Mascarenhas/File Photo
NEW DELHI – In July, India’s wholesale price index saw a smaller than expected decline of 1.36 percent year-on-year due to higher prices for food and some commodities. Economists had predicted a decline of 2.7 percent for July, following a 4.12 percent decline in June. Fuel and power prices fell 12.79 percent from the previous year, slightly less than the fall in June. Primary article prices rose 7.57 percent, whereas they had fallen by 2.87 percent in June. Food prices increased by 7.75 percent compared to a 1.24 percent decline in June. Manufactured product prices also declined, but at a slower rate of 2.51 percent in July compared to 2.71 percent in June. This increase in inflation comes after a period of easing in the early months of the year.
According to a Reuters poll of economists, India’s retail inflation is expected to reach 6.4 percent in July, primarily due to surging food prices. This would exceed the Reserve Bank of India’s (RBI) 2 percent-6 percent tolerance band for the first time in five months. Data on this will be released later in the day. Last week, the RBI kept its key lending rate unchanged but reduced the amount of cash in the banking system in response to concerns about rising inflation, especially in food prices. Rupa Rege Nitsure, the group chief economist at L&T Finance, commented that the decline in WPI reflects the spike in food prices, particularly vegetables, and supports the RBI’s decision to monitor the situation carefully.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
