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India’s WPI Inflation Dips to Negative Territory at -0.92% in April

WPI inflation falls below zero at -0.92% in April, first time since July 2020

WPI BELOW ZERO

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In April of this year, the annual wholesale price-based inflation (WPI) declined to -0.92 per cent, down from 1.34 per cent in March 2023, which was lower than the predicted fall of 0.20 per cent according to a Reuters poll. This marks the first time in nearly three years that WPI inflation has decreased, with prices across the board softening. The Ministry of Commerce & Industry stated that the primary contributing factor to the decline in the inflation rate in April 2023 was the decrease in prices of basic metals, food products, mineral oils, textiles, non-food articles, chemical & chemical products, rubber & plastic products, and paper & paper products.

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During the month of April, the food index showed a 0.17 per cent increase year-on-year, which is lower than the 2.32 per cent increase seen in March. Fuel and power prices rose by 0.93 per cent, down from 8.96 per cent in March, while primary products increased by 1.60 per cent. On the other hand, manufactured products recorded a decline of 2.42 per cent compared to the decrease of 0.77 per cent in March. The WPI has been steadily decreasing for the past 11 months, starting from the 20-year high of 16.63 per cent that was recorded in May 2022.

Under the primary articles category, the food items saw a rise in inflation with food articles increasing to 3.54 per cent as compared to 8.48 per cent in April 2022. Cereals experienced a 7.69 per cent increase, while wheat saw a rise of 7.27 per cent. Vegetables showed a -1.5 per cent inflation, milk saw a rise of 7.1 per cent, and eggs, meat & fish rose by 0.77 per cent year-on-year. Meanwhile, non-food articles recorded a WPI inflation of -6.59 per cent in April 2023, with minerals going up by 6.87 per cent and crude petroleum & natural gas increasing by 1.64 per cent.

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In April 2023, the Fuel & Power category saw negative inflation for LPG at -10.49 per cent, while petrol increased by 1.53 per cent and HSD rose to 1.42 per cent. In the manufactured products category, food products recorded negative inflation at -5.65 per cent, while beverages rose to 2.51 per cent, tobacco was up 2.49 per cent, and apparel was at 2.25 per cent. Additionally, several groups such as chemicals & chemical products, basic metals, food products, fabricated metal products except machinery & equipment, paper & paper products, etc. have experienced a decrease in prices.