Wholesale Inflation Hits 6-Month Low: A Price Drop Story

Wholesale price inflation in India dropped to 2.05% in March, marking a six-month low. The decline is attributed to lower food prices, particularly vegetables and potatoes. The Reserve Bank of India continues to focus on retail inflation for monetary policy, having recently cut the policy rate to stimulate the economy.

Wholesale inflation in India has reached a six-month low of 2.05% in March, driven by a substantial easing in food prices, notably vegetables and potatoes, according to government data released on Tuesday.

The Wholesale Price Index (WPI) based inflation had previously stood at 2.38% in February. The Ministry of Industry attributes the current positive inflation rate primarily to the rising costs in manufacturing sectors like food products, textiles, and electricity.

Economists caution that global trade tensions may continue to affect commodity prices, potentially influencing future WPI inflation dynamics. Currently, retail inflation remains a key metric for the Reserve Bank of India in shaping monetary policy, which was recently adjusted to foster economic growth.

(With inputs from agencies.)