Wholesale inflation in May declines to over 7 years low of -3.48%

This decline in the rate of inflation in May, 2023 is primarily due to a fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum & natural gas.

After retail inflation easing to a 25-month low of 4.25 percent in the month of May, 2023, the annual rate of inflation based on all India Wholesale Price Index (WPI) number has also gone down to -3.48% for the month of May, 2023. At -3.48%, the latest WPI inflation is the lowest in seven-and-a-half years.

This decline in the rate of inflation in May, 2023 is primarily due to a fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum & natural gas and chemical & chemical products. The month over month change in WPI for the month of May, 2023 stood at (-) 0.86 % as compared to April, 2023.

Earlier, the retail inflation declined to a 25 month low of 4.25% in May, 2023. This happened on account of softening prices of mainly food and fuel items. This is the fourth straight month when retail inflation has declined owing to constant efforts being made by the Reserve Bank of India (RBI).

This is also the third month in a row that Consumer Price Index (CPI) based inflation has remained within the RBI’s comfort zone of below 6%, and is the lowest since April 2021 when it was 4.23%. A sharp fall in international prices of LPG and kerosene can also be the contributory factors to this softening of retail inflation in May. Normally, the government wants to ensure that the CPI-based inflation remains at 4% with a margin of 2% on either side.

The WPI for May, 2023 have been compiled at a weighted response rate of 89.8 percent, while the final figure for March, 2023 is based on the weighted response rate of 92 percent. The provisional figures of WPI will undergo revision as per the final revision policy of WPI.

The DPIIT releases index numbers of wholesale price in India on monthly basis on 14th of every month with a time lag of two weeks of the reference month, and the index numbers are compiled with data received from institutional sources and selected manufacturing units across the country.