The Ministry of Commerce and Industry has announced that India’s wholesale inflation in May reached a remarkable low, falling to (-) 3.48 percent year-on-year. This significant drop from April’s (-) 0.92 percent marks the lowest wholesale inflation recorded in the past seven and a half years.
The decline in wholesale inflation was primarily attributed to a substantial fall in prices across various sectors. Mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum and natural gas, as well as chemical and chemical products, all experienced notable price decreases.
This May data for the Wholesale Price Index (WPI) indicates a remarkable turnaround from the situation just a year ago when India witnessed wholesale inflation at a staggering 16.63 percent. Such a substantial decrease in inflation aligns with the easing of retail inflation in May, which reached a 25-month low of 4.25 percent.
Digging deeper into the data, inflation in food articles witnessed a decline to 1.51 percent in May, compared to 3.54 percent in April. Moreover, the fuel and power basket experienced a significant drop in inflation, reaching (-) 9.17 percent in May, in contrast to 0.93 percent in April. In the manufactured products category, the WPI inflation rate stood at (-) 2.97 percent in May, slightly lower than (-) 2.42 percent in April.
This decline in wholesale inflation brings a ray of hope for the Indian economy, as it indicates a favorable environment for businesses and consumers alike. Lower inflation levels often result in increased purchasing power for consumers, boosting domestic demand. Furthermore, reduced production costs for businesses could lead to increased profitability and potentially encourage investments and expansion.
The government’s efforts to stabilize prices and maintain favorable economic conditions seem to be yielding positive results. However, it will be crucial to monitor these trends closely in the coming months to ensure sustained economic recovery and stability.
Overall, India’s wholesale inflation dropping to a seven-year low of (-) 3.48 percent is a positive development that could stimulate economic growth and enhance consumer sentiment in the country.
Sources By Agencies