WPI Speculated to Rise in Ongoing Fiscal Year
According to experts, the Wholesale Price Index (WPI) in India is projected to climb in the second half of the current fiscal year, and a prolonged deflationary trend could have an influence on GDP. In September, wholesale inflation remained negative for the sixth consecutive month, at (-) 0.26 percent, due to lower food prices, particularly vegetables. WPI deflation in September is mostly attributable to lower prices for chemicals and chemical goods, mineral oils, textiles, basic metals, and food products compared to the previous year, according to the commerce and industry ministry on Monday.
"In September, the WPI contracted for the sixth consecutive month, falling 0.3% year on year (y-o-y), lower than the previous month's contraction of 0.5 percent."
"The continued contraction in WPI can be attributed to the deceleration in food prices, as well as the ongoing decline in fuel and manufactured product prices," Sinha said. While the fading impact of a high base may contribute to a "slight increase" in WPI in the second half of the fiscal year, overall WPI inflation is projected to stay modest, according to her.
Elevated global crude oil prices, as well as potential hazards to the kharif harvest due to irregular rainfall, pose upside risks to WPI inflation, according to Sinha. While the decrease in fuel prices is welcome news, Abhirup Sarkar, an economist and professor at the Indian Institute of Statistics, told PTI that geopolitical conflicts in Russia and the Middle East could lead to an increase in international oil prices, affecting wholesale price inflation in India