New Delhi: Wholesale inflation rate eased to 34-month low of (-) 0.92 per cent in April on easing prices of food, fuel and manufactured items. The wholesale price index (WPI) based inflation has been on a declining trend for 11 months in a row and entered the negative zone in April.
In June 2020 WPI was at (-) 1.81 per cent. WPI inflation was 1.34 per cent in March and 15.38 per cent in April last year. Inflation in food articles too eased to 3.54 per cent in April, against 5.48 per cent in March.
"Decline in the rate of inflation in April, 2023 is primarily contributed by fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products and paper & paper products," the commerce and industry ministry said on Monday.
Fuel and power basket inflation eased to 0.93 per cent in April from 8.96 per cent in March. In manufactured products, inflation rate was (-) 2.42 per cent, as against 0.77 per cent in March. The deceleration in WPI comes in line with the easing of April retail inflation, which came in at an 18-month low of 4.70 per cent.
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Meanwhile, retail inflation in India too eased sharply in April to 4.7 per cent or an 18-month low, as against 5.7 per cent the previous month. India's retail inflation was above RBI's 6 per cent target for three consecutive quarters and had managed to fall back to the RBI's comfort zone only in November 2022. Under the flexible inflation targeting framework, the RBI is deemed to have failed in managing price rises if the CPI-based inflation is outside the 2-6 per cent range for three quarters in a row.
The Reserve Bank of India, in its first monetary policy review meeting this fiscal in April, decided to keep the key benchmark interest rate -- the repo rate (the rate at which the RBI lends to other banks) -- unchanged at 6.5 per cent, to assess the effects of the policy rate tightening done so far.
Barring the recent pause, the RBI has raised the repo rate by 250 basis points cumulatively since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline. (With Agency inputs)
