For four successive months, wholesale price-based inflation persisted in the negative territory. In July, it stood at (-)1.36 per cent due to reducing rates of fuel, while food products turned more expensive. The wholesale price index or WPI-based inflation rate was (-)4.12 per cent in June, and it has been in the negative since April. It was 14.07 per cent last year in July.
In July, the inflation in food products soared by 14.25 per cent against 1.32 per cent in June. “Decline in the rate of inflation in July 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products,” said the commerce and industry minister, Piyush Goyal.
From (-)12.63 per cent in June, the fuel and power basket inflation lessened to (-)12.79 per cent in July. As against (-)2.71 per cent in June, the inflation rate was (-)2.51 per cent in manufactured products.
The interest rates remained consistent at 6.5 per cent for the third consecutive meeting by RBI but motioned a more uncompromising policy if the prices of food drive inflation higher. “The job on inflation is still not done. Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions, and weather-related uncertainties,” stated Shaktikanta Das, the RBI Governor.
Specifying persuasions from food prices, the RBI raised its inflation prediction to 5.4 per cent from 5.1 per cent earlier for the current financial year ending March 2024. For articulating monetary policy, the central bank anticipates account retail or consumer price index-based inflation. The comfort zone of RBI was busted by the retail inflation, and it rose to a 15-month high of 7.44 per cent in July.