WPI Inflation Rate Dropped 29-Month Low Of 1.34% In March

The Wholesale Price Index (WPI) inflation rate dropped to its 29-month low in March. Due to the moderation in the price of manufacturing goods and commodities, the inflation rate of goods was 1.34% in March from 3.85% in February. As per the data released by the Ministry of Commerce on Monday, the manufacturing items rate contracted by -0.77%, which was 1.94% in February, leading to a surge in the price of various items like pharmaceuticals, cement, and chemicals.

Rajani Sinha, Chief Economist at Care Rating, said, “Manufactured products had seen a deflation for the first time in about three years, largely due to lower textile and metals prices.” 

It is the sixth consecutive month in which the WPI inflation rate was down and caused the decline in manufacturing dip. The food index inflation was eased to 2.32% in March from 2.76% in February.

In the official statement, the Ministry of Commerce And Industry stated, “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.” 

However, it also led to a surge in the price of pulses(3.03 per cent), while there was a marginal contraction in the price of vegetables, cereals, paddy, wheat, milk, etc., in March. The WPI inflation rate fell after the retail inflation, which declined to 5.84% at the end of March.

Also Read: US Emerges As India’s Biggest Trading Partner For FY23

The effects of the inflation rate can be seen in the price of various commodities. RBI cautioned about the adverse impact of climatic conditions on the future inflation trajectory earlier this month. In its monetary policy, the central bank paused the interest rate hike and projected the retail inflation to an average of 5.2% in the current fiscal year.

Leave a Reply