Wholesale inflation in India fell to 2.31 percent in January 2025, reflecting a decline in food prices and aligning with the moderation in retail inflation, which stood at 4.3 percent. The drop is attributed to positive economic indicators and RBI's efforts to control inflation through repo rate adjustments.
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Following the moderation in retail inflation, wholesale inflation in India also registered a decline in January 2025, as per the latest government data.
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The annual inflation rate, based on the all-India Wholesale Price Index (WPI), stood at 2.31 per cent (provisional) for January, showing a marked decrease compared to previous months. According to the figures released on Friday, the WPI inflation rate continues to reflect positive growth, primarily due to rising prices in sectors such as food product manufacturing, food articles, textiles, non-food articles, and other manufacturing industries.
Although wholesale inflation remains in the positive zone for over a year now, economists often view a moderate rise in wholesale inflation as a positive indicator. They argue that such an increase typically incentivises manufacturers to produce more, boosting supply chains and overall economic growth.
Focusing on the food index, which holds a significant 24.38 per cent weightage, the rate of wholesale inflation was 7.47 per cent in January. This marked a decrease from the previous month's 8.89 per cent. This reduction in food inflation is a notable development, as food prices had been a major contributor to rising inflation levels in the preceding months.
The government releases monthly data on wholesale inflation, and these figures are based on institutional sources and selected manufacturing units across the country. On the other hand, the retail inflation rate for January stood at 4.3 per cent, which is a five-month low and remains well within the Reserve Bank of India’s target range of 2-6 per cent. This suggests that while inflationary pressures persist, they are under control.
As per ANI, retail inflation in India had been significantly impacted by soaring food prices, particularly the rising cost of vegetables, fruits, and oils. However, the data indicates a stabilisation in food prices, which has alleviated some of the pressure on inflation.
In line with efforts to bring down inflation, the Reserve Bank of India (RBI) had kept the repo rate high at 6.5 per cent for almost five years to curb inflationary pressures. The repo rate is the interest rate at which the RBI lends to commercial banks. Recently, however, the RBI reduced the repo rate by 25 basis points, a move intended to stimulate economic growth and consumption in the country.
As per ANI, the decline in wholesale inflation, alongside a reduction in food price inflation, offers a promising outlook for the Indian economy as it continues to navigate inflationary challenges.
(With inputs from ANI)
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