New Delhi :
India’s wholesale price index-based (WPI) inflation for December 2022 fell to an almost two-year low of 4.95 percent, owing to sliding food and crude as well as petroleum prices.
WPI-based inflation was 5.85 percent in November 2022.
Experts also said this would result in a fall in consumer price index inflation in Q4FY23.
“Fall in prices of food articles, mineral oils, crude petroleum and natural gas, food products, textiles, and chemicals & chemical products contributed to a slide in wholesale price index-based inflation,” a statement issued by the Union Commerce Ministry said.
The WPI inflation slipped below the 5 percent mark for the first time since February 2021, when it was at 4.83 percent.
Reacting to the latest WPI percentage Suman Chowdhury, Chief Analytical Officer, Acute Ratings & Research said it continues to drop rapidly and at 4.95 percent for December 2022 has subsided below 5 percent for the first time in 21 months.
“This is clearly driven by the moderation in global commodity prices, including that of food. The incremental relief is reflected in the disinflation of primary articles where prices saw a sequential contraction for successive two months at 1.93 percent and 2.98 percent in Nov-22 and Dec-22 respectively,” Chowdhury said.
According to Chowdhury, it is also noteworthy that the sequential inflation in manufactured products has remained zero or in the negative zone since August 2022 reflecting a larger slowdown in manufactured goods at the global level along with the correction in the input prices.
What’s encouraging to see is the quicker drop in core WPI inflation which declined to 3.19 percent in Dec-22 from 7.03 percent in Sep-22.
“The sharper drop in wholesale inflation is likely to translate into a steady downtrend in headline CPI inflation in Q4FY23 unless any new surprises come up. While we continue to forecast another 25 bps of a rate hike by MPC (Monetary Policy Committee) in Feb-23, the likelihood of a pause has increased with the latest CPI and WPI data prints,” Chowdhury said. IANS