Image used for representational purposes only. | Photo credit: Sushil Kumar Verma
Wholesale price inflation in India slowed to 1.34% in March, as prices for manufactured goods fell almost 0.8% from a year ago, as headline price inflation in fat was 14.5%. Inflation as 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 rise of 2.8% in February to 2.3% in March, inflation for primary items fell from 3.3% to 2, 4%, while fuel and electricity inflation fell from 14.8% to 9% over the same period. .
Also read: Wholesale price inflation eased to 4.7% in January
Contrary to the general trend, however, food item inflation accelerated to a five-month high of 5.5% in March, from 3.8% in February. Grain and wheat inflation, despite returning to multi-month lows, remained stable at 9.5% and 9.2%, respectively. Paddy prices rose 7.5% in March, the second highest pace in the past six months.
Vegetable prices continued to fall for the fifth consecutive month, but the contraction from a year ago fell to 2.2% in March from 21.5% in February. Sequentially, vegetable prices are up 5.5% in the past month from February levels.
Milk inflation remained high at 8.5%, while onion prices fell year-on-year for the 19th consecutive month since September 2021, with prices falling 36.8% in March. After four months of deflation, LPG prices increased by 3.3% in March. Textile products recorded a fourth consecutive month of falling prices, with the rate of deflation dropping from 3.5% in February to 4.9% in March.
“The decline in the inflation rate in March 2023 is mainly due to lower prices for base metals, food, textiles, non-food items, minerals, rubber and plastic products, crude oil and natural gas and paper and paper products,” the Department of Trade and Industry said in a statement.
The retail inflation rate, as measured by the consumer price index (CPI), had hit a 15-month low of 5.66% in March, largely due to base effects, the same month of last year which recorded a rate of increase in prices of nearly 7%. . The spread between wholesale and retail inflation rates in the country narrowed 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 has been revised slightly upwards from the previously estimated 4.73% to 4.8%, the statement said.
Month-over-month, the WPI was unchanged from February levels, with a sequential rise in primary items (1.2%) and food inflation (0.47%) offset by a decline in 1.3% in fuel and electricity and a drop of 0.3% in the prices of manufactured goods.