Wholesale inflation dipped to 1.34% in March

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| Photo Credit: Sushil Kumar Verma

India’s wholesale price rise slowed to 1.34% in March, with manufactured products prices falling nearly 0.8% from a year ago, when overall wholesale inflation was at 14.5%. Inflation measured by the Wholesale Price Index (WPI) stood at a 25-month low of 3.85% in February 2023.

While the Wholesale Food Index saw a slight reduction from the 2.8% uptick in February to 2.3% in March, primary articles inflation eased from 3.3% to 2.4%, while fuel and power inflation cooled to from 14.8% to 9% over the same period.

Also read: Wholesale inflation eased to 4.7% in January

Bucking the overall trend, however, inflation in Food articles accelerated to a five-month high of 5.5% in March, from 3.8% in February. Cereals and wheat inflation, despite cooling to multiple-month lows, remained sticky at 9.5% and 9.2%, respectively. Paddy prices rose 7.5% in March, the second highest pace in the last six months.

Vegetables prices continued to fall for the fifth month in a row, but the contraction from a year ago dropped to 2.2% in March from 21.5% in February. Sequentially, vegetable prices were up 5.5% during the last month from February’s levels.

Milk inflation remained high at 8.5%, while onion prices fell year-on-year for the 19th month in a row since September 2021, with prices falling 36.8% during March. After four months of deflation, LPG prices rose 3.3% in March. Textiles products recorded a fourth successive month of falling prices, with the deflation rate quickening from 3.5% in February to 4.9% in March.

“Decline in the rate of inflation in March, 2023 is primarily contributed by fall in prices of basic metals, food products, textiles, non-food articles, minerals, rubber & plastic products, crude petroleum & natural gas and paper and paper products,” the Commerce and Industry Ministry said in a statement.

The retail inflation rate, measured by the Consumer Price Index (CPI), had eased to a 15-month low of 5.66% in March, thanks largely to base effects as the same month last year had recorded a nearly 7% pace of price rise. The gap between the wholesale and retail inflation rates in the country expanded from 259 basis points (bps) in February to 432 bps, a level last seen around October 2020. One basis point equals 0.01%.

The inflation rate for January 2023 was revised slightly upwards from 4.73% estimated earlier to 4.8%, the statement indicated.

On a month-on-month basis, the WPI was unchanged from February levels, with a sequential uptick in primary articles (1.2%) and food inflation (0.47%) offset by a 1.3% dip in fuel and power and a 0.3% decline in manufactured products prices.