News Details

In August, wholesale price-based inflation continued its negative trend for the fifth consecutive month, registering at (-)0.52 percent. However, there were increases in the prices of food articles and fuel.

The Wholesale Price Index (WPI) has been in negative territory since April, with a rate of (-)1.36 percent in July. To provide context, in August of the previous year, it stood at a high of 12.48 percent.

In August, inflation in food articles remained in double digits at 10.60 percent, although this was lower than the 14.25 percent recorded in July.

The Ministry of Commerce and Industry explained, "The negative inflation rate in August 2023 can be attributed primarily to the decline in prices of mineral oils, basic metals, chemical & chemical products, textiles, and food products compared to the same month in the previous year."

The inflation rate for the fuel and power basket was (-)6.03 percent in August, a decrease from (-)12.79 percent in July.

In the category of manufactured products, the inflation rate was (-)2.37 percent in August, slightly improved from (-)2.51 percent in July.

The Reserve Bank of India (RBI) maintained the key interest rate at 6.5 percent in its latest meeting, marking the third consecutive meeting with no changes. However, the RBI signaled a possibility of adopting a tighter monetary policy if food prices contribute to higher inflation.

It's worth noting that the RBI primarily considers retail or consumer price index-based inflation when formulating its monetary policy. Retail inflation data for August indicated a rate of 6.83 percent, a decrease from the 7.44 percent recorded in July.