WPI inflation slows to 3.57% as vegetable prices soften


Wholesale inflation eased to 3.57 per cent in September as food articles, led by vegetables, witnessed softening of prices.

The wholesale price-based inflation, reflecting the annual rate of price rise, in August stood at 3.74 per cent. In September 2015, WPI inflation was (-)4.59 per cent.

Wholesale Price Index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (-)10.91 per cent in September. Inflation in this category had scaled a high of 28.45 per cent in July.

This was aided by inflation data for onion, which was at (-)70.52 per cent.

Pulses inflation continued to rule high at 23.99 per cent in September, according to the Commerce Ministry data.

Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 73.31 per cent. Inflation in fruits rose 14.10 per cent during the month.

Overall, the food inflation basket showed good moderation with inflation at 5.75 per cent in September, as against 8.23 per cent in August.

The WPI, which was in the negative zone from November 2014 to March 2016, had been rising for six months till August. In September, the inflation has slowed.

The inflation print for manufactured articles read at 2.48 per cent in September, as against 2.42 per cent in August.

The rate of inflation in sugar was at 32.92 per cent and that for petrol was 1.25 per cent.

The WPI inflation for July has been revised upwards at 3.72 per cent, against provisional estimate of 3.55 per cent.

The wholesale inflation in September is in sync with the retail inflation which eased to a 13-month low of 4.31 per cent in the month.

The all-powerful Monetary Policy Committee headed by RBI Governor Urjit Patel last week cut benchmark interest rates by 0.25 per cent to 6.25 per cent.

While he had signalled more tolerance towards inflation, the easing in CPI data was in line with the RBI’s forecast for average 5 per cent inflation in fourth quarter of 2016. This, many expect, would create more room for interest rate cuts.