The wholesale price-based inflation eased to a five-month low of 13.93 per cent 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 per cent in May, declined to 15.18 per cent in June. It was 13.43 per cent in February. It was 11.57 per cent in July last year.
The WPI inflation eases to 5-month low of 13.93 pc in July; food prices soften continued its 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 per cent from 14.39 per cent in June. The rate of price rise in vegetables declined substantially to 18.25 per cent in July against 56.75 per cent in the previous month.
In the fuel and power basket, inflation was 43.75 per cent in July compared to 40.38 per cent in the last month. Inflation in manufactured products and oil seeds was 8.16 per cent and (-) 4.06 per cent, 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 retail inflation higher.
“The global economy is recovering as we witness an increase in demand for metals, oils, crude and fertilisers. Moving forward, as the crude prices soften in the summer season and supply issues getting resolved will help ease WPI inflation in the next few months,” Reddy added.The Reserve Bank of India mainly looks at retail inflation to frame monetary policy. Retail inflation remained above the Reserve Bank’s comfort level for the seventh month in a row and was 6.71 per cent in July.
To tame stubbornly high inflation, the RBI has hiked the key interest rate three times this year to 5.40 per cent. The central bank had projected retail inflation to average 6.7 per cent in 2022-23.