Wholesale Inflation Worsens To 3.1% In January Amid Economic Slowdown



Wholesale Inflation Worsens To 3.1% In January Amid Economic Slowdown

Gauged by the Wholesale Price Index, wholesale inflation is the rate of increase in wholesale prices

Wholesale inflation worsened to 3.1 per cent in January from 2.59 per cent in the previous month, government data showed on Friday. The build-up inflation rate stood at 2.50 per cent so far this financial year, as against 2.49 per cent in the corresponding period a year ago, the Ministry of Commerce said in a statement. The release of wholesale inflation data comes at a time when the economy is staring at the worst pace of annual expansion in more than 11 years, and the central bank has paused further monetary easing after reducing the key rates by 135 basis points (1.35 percentage point) last year.

Wholesale food inflation – or the rate of increase in wholesale food prices – softened to 10.12 per cent last month compared with 11.05 per cent in December, the data showed.

Friday’s official data on wholesale inflation – gauged by the Wholesale Price Index (WPI) – follows the release of separate data which showed consumer inflation in January hit the highest level recorded since May 2014, dashing hopes of further monetary easing by the central bank for the time being. 

The Reserve Bank of India (RBI) tracks consumer inflation primarily for formulating its monetary policy.

The central bank this month kept the key rates unchanged at existing levels while maintaining the status quo on its “accommodative” policy stance in its sixth bi-monthly review of current financial year.

In 2019, the RBI lowered the repo rate, or the key interest rate at which it lends short-term funds to commercial banks, in five out of six bi-monthly policy reviews to aid growth. 


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