Decline in prices of food items especially vegetables has led to a dip in wholesale inflation to a three-month low of 2.04 per cent in July. Official data showed that the fall in wholesale price index (WPI) based inflation in July came after it rose for four months until June when it was 3.36 per cent. It was (-) 1.23 per cent in July last year. In April wholesale inflation it stood at 1.19 per cent.
According to the data, food inflation in July was 3.45 per cent -- down from 10.87 per cent in June -- mainly due to a month-on-month decline in prices of vegetables, cereals, pulses and onions. Vegetables recorded a deflation of 8.93 per cent in July, against a 38.76 per cent inflation in the previous month.
A statement issued by the Commerce and Industry Ministry said the positive rate of inflation in July 2024 is primarily due to an increase in prices of food articles, manufacture of food products, mineral oils, crude petroleum and natural gas, and manufacturing.
The decline in July WPI was in line with the retail inflation data for the month. Retail inflation fell to a near 5-year low of 3.54 per cent in July, data released earlier this week showed.
The Reserve Bank of India (RBI), which mainly takes into account retail inflation while framing the monetary policy, kept the benchmark interest rate or repo rate unchanged for the ninth consecutive time in its August monetary policy review at 6.5 per cent.
Analysts said the decline in July food inflation would provide a breather to the RBI which had earlier this month said that the interest rate setting monetary policy committee (MPC) cannot ignore persistent high food inflation.
