Wholesale inflation in India declines to 0.85%—lowest in 13 months
What's the story
India's wholesale inflation rate for April has hit a 13-month low, partially due to moderating food prices. According to government data released today, the year-on-year wholesale inflation rate stood at 0.85% in April, down from March's 2.05%. It is also lower than the estimated 1.76% predicted by economists in a Reuters poll and the slowest pace since March 2024.
Food inflation
Wholesale food prices see a slight increase
Even though wholesale inflation slowed down, food prices still rose—just more slowly. In April, these prices increased by 2.55% year-on-year, as opposed to a larger 4.66% increase seen in March. Meanwhile, vegetable prices saw a major drop of 18.26%, following an earlier 15.88% decline in March. This fluctuation highlights the volatility within the food sector's contribution to wholesale inflation rates.
Energy costs
Fuel and power prices witness a decrease
Along with food prices, fuel and power costs also witnessed a decline in April. These prices declined by 2.18% year-on-year, as opposed to a slight increase of 0.20% witnessed in the month of March. This decrease further contributed to the overall slowdown in wholesale inflation for April, showing how changes in energy costs can have a major impact on overall inflation rates.
Inflation control
Retail inflation remains below RBI's target
India's retail inflation has stayed below the RBI's 4% target for three straight months. This trend could pave the way for further interest rate cuts to boost growth. The RBI has already cut its key repo rate for the second time this year, showing a proactive approach to managing inflation and boosting economic activity.