On the back of declining prices for manufactured goods and fuel, wholesale price-based inflation inched down to a 29-month low of 1.34 percent in March, despite rising food costs. The wholesale pricing index (WPI)-based measure of inflation has decreased for ten consecutive months, starting in March. From 3.85% in February to 14.63% in March 2022, the inflation rate increased.
Even while the inflation rate for vegetables, onions, and potatoes remained negative, it increased at a faster rate than it did in February. Vegetables saw a greater (-)2.22 percent in March compared to (-)21.53 percent in February. Inflation in the onion industry was (-)36.83% in March, up from (-)40.14% the month before.
The pace of price growth for the headline WPI in March dropped to its lowest level since October 2020, when it was 1.31 percent. Inflation in food-related items increased to 5.48 percent in March from 3.81 percent in February. In March 2023, the inflation rates for wheat, pulses, and oilseeds were 9.16%, 3.03%, and (-)15.05%, respectively.
The slowdown in WPI is consistent with the drop in March’s retail inflation. Retail inflation measured by the consumer price index fell from 6.44 percent in February to a 15-month low of 5.66 percent in March.
The RBI warned that unfavorable weather conditions pose a risk to the trend of inflation in its monetary policy review earlier this month and projected that milk prices would hold steady into the summer due to a tight supply-demand scenario and pressure from rising feed costs.
