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EconomyWPI inflation eases to 5-month low; food prices reduce

WPI inflation eases to 5-month low; food prices reduce

The wholesale price-based eased to a five-month low of 13.93% in July on easing prices of food articles and manufactured products. The WPI-based inflation softened for the second consecutive month in July, raising hopes of further decline in wholesale prices in the months to come. The Wholesale Price Index-based inflation, after scaling a record high of 15.88% in May, declined to 15.18% in June. It was 13.43% in February. It was 11.57% in July last year.

As the WPI eased to a 5-month low of 13.93 pc in July, food prices continued their declining trend for the second month in July but remained in double-digits for the 16th consecutive month beginning April last year. Inflation in food articles in July eased to 10.77% from 14.39% in June. The rate of in vegetables declined substantially to 18.25% in July against 56.75% in the previous month.

In the fuel and power basket, was 43.75% in July compared to 40.38% in the last month. Inflation in manufactured products and oil seeds was 8.16% and (-) 4.06%, respectively. CRCL LLP CEO and Managing Partner DRE Reddy said higher crude oil prices and input costs still weigh on the producers and pass-through has resulted in pushing the inflation higher.

“The global economy is recovering as we witness an increase in for metals, oils, crude and fertilisers. Hereafter, the crude prices softening in summer and supply issues getting resolved will help ease WPI in the next few months,” Reddy said.

The Reserve Bank of India focuses on retail to frame monetary policy. Retail inflation remained above the central bank’s comfort level for the seventh month in a row and was 6.71% in July.

To tame stubbornly high inflation, the RBI has hiked the key three times this year to 5.40%. The central bank had projected retail to average 6.7% in 2022-23.

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