Wholesale Price Index (WPI)-based inflation remained in negative territory for the fourth consecutive month in July at (-)1.36 per cent on easing prices of fuel, even though food articles turned costlier.
The inflation rate based on the Wholesale Price Index (WPI) has remained negative since April, and was (-)4.12 per cent in June. In comparison, it was at 14.07 per cent in July last year. Notably, the inflation rate for food articles surged to 14.25 per cent in July, a significant increase from the 1.32 per cent recorded in June.
"Decline in the rate of inflation in July, 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products," the Commerce and Industry Ministry said on Monday.
In July, the inflation rate for the fuel and power category slightly decreased to (-)12.79 per cent, from -(-)12.63 per cent in June. In manufactured products, the inflation rate was (-)2.51 per cent in July, showing a slight improvement from the (-)2.71 per cent recorded in June. The Reserve Bank of India (RBI) last week maintained the interest rates at 6.5 per cent for the third consecutive time, but signalled tighter policy if food prices drive inflation higher.
"The job on inflation is still not done," RBI Governor Shaktikanta Das had said. "Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather-related uncertainties."
The RBI raised its inflation forecast for the current financial year ending March 2024 to 5.4 per cent from 5.1 per cent earlier, citing pressures from food prices.
The central bank takes into account retail or consumer price index based inflation for formulating monetary policy. Retail inflation data for July is scheduled to be released later in the day.
(WIth PTI inputs)