Discover the surprising reasons behind the recent plunge in WPI inflation! From plummeting food prices to unexpected trends in fuel and power, find out what’s driving this sudden change and how it could impact your wallet.
WPI Inflation Hits Three-Month Low in January
The wholesale price index inflation took a bit of a dip in January, hitting a three-month low of 0.27 percent. This drop was mainly because of a slowdown in food prices, especially for vegetables. Just to give you a bit of context, from April to October last year, inflation was in the negative zone, but it turned positive in November at 0.39 percent.
In January 2023, it was significantly higher at 4.8 percent, while in December 2023 it was at 0.73 percent. The Commerce and Industry Ministry announced that the annual food prices and commodities prices, based on the All India Wholesale Price Index, stood at 0.27 percent for January 2024 compared to January 2023.
The last time we saw such a low Wholesale Price Index was back in October 2023, when it was at (-) 0.26 percent. In January, food inflation slowed down to 6.85 percent from 9.38 percent in December 2023. Within the food category, vegetable prices saw a significant drop to 19.71 percent from 26.3 percent in December. Potato prices were in the negative zone.
Must Read
Trends in Fuel and Power Segment
Prices of fruits, eggs, milk, fish, and milk also eased up a bit. In the fuel and power segment, the index was at (-) 0.51 percent in January, compared to (-) 2.41 percent in December 2023. In manufactured products, the index was at (-) 1.13 percent, compared to (-) 0.71 percent in the previous month.
Earlier this month, the Reserve Bank decided to keep interest rates steady in its bi-monthly monetary policy to help bring down the Consumer Price Index (CPI) to 4 percent. However, it is still hovering over 5 percent.
According to government data, the month-over-month change in the Wholesale Price index for January 2024 stood at (-) 0.33 percent compared to December 2023. The index for primary articles declined by 1.04 percent to 181 in January 2024 from 182.9 in December.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and the Office of Economic Advisor of India contributed to the above report