New Delhi: India’s annual wholesale price-based inflation (WPI) in April fell for the first time in nearly three years with (-) 0.92 per cent. The reason behind the decrease is the easing of prices of food, fuel and manufactured items, data released by the Ministry of Commerce and Industry showed on May 15.

In April, the food index rose by 0.17 per cent, in comparison to 2.32 per cent in March, whereas, fuel and power rose by 0.93 per cent in comparison to 8.96 per cent in the previous month.

WPI in the past

In July 2020, WPI recorded deflation at (-) 0.25 per cent and the previous fall was seen 34 months back in June 2020, at (-) 1.81 per cent. Whereas, the wholesale inflation rate was 1.34 per cent in March 2023, and 15.38 per cent in April 2022. On the other hand, the wholesale commodities index remained intact at 150.9 and 3.85 per cent since February.

The decline in the inflation rate in April 2023 occurred majorly due to a fall in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical and chemical products, rubber and plastic products and paper and paper products. May is the 11th consecutive month from 20-year highs when WPI inflation has lowered by 16.63 per cent

Previously, in April National Statistical Office (NSO) released data which showed retail inflation coming down to an 18-month low of 4.7 per cent, falling under the Reserve Bank of India’s upper tolerance level of 6 per cent.

“A deflationary trend in wholesale inflation, which reflects prices at producers’ end, is likely to reflect later in the retail inflation too with a lag. We expect the deflationary trend to continue for the next 2-3 months with the full year WPI inflation averaging in the range of 1-2%. A lower WPI print could help in pulling retail inflation down with its lagged impact on the core CPI inflation,” said Rajani Sinha, Chief Economist, CareEdge Ratings.