Wholesale inflation continues downtrend, moderates to 1.34% in March: In March 2023, India’s wholesale-price-based inflation reduced as input costs continued to decline. According to data given by the government on Monday, April 17, 2023. The annual wholesale price inflation (WPI) was recorded at 1.34% year-on-year, which is a significant decrease from the previous month’s reading of 3.85%. The percentage is also lower than the 1.87% predicted by Reuters pollsters, indicating that the Indian economy is stabilising.
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What led to this relief:
The drop in inflation is mainly attributed to lower fuel and food prices. Fuel and power inflation stood at 2.81% in March, down from 8.98% in the same period last year. Food inflation, too, was moderate, with a reading of 3.41% in March, compared to 4.28% in February. Inflationary pressures may ease, allowing the Reserve Bank of India (RBI) to retain its accommodative policy stance and sustain growth.
RBI’s continuous effort:
The RBI has been taking several measures to boost the economy, including maintaining low interest rates and liquidity support. The recent reduction in inflation may provide the central bank some leeway in its monetary policy stance. However, the RBI will continue to closely monitor the evolving economic conditions and inflationary pressures.
Significance of this development:
The lower inflation figures could also have a positive impact on consumer spending and business investments. With inflation under control, consumers are likely to have more disposable income, which could boost spending. Lower input costs could also encourage businesses to invest more and expand their operations, which could lead to job creation and economic growth.
It is worth noting that the global economic conditions and commodity prices could still impact India’s inflation outlook. Any adverse global economic developments could lead to higher fuel and commodity prices, which could push up inflation in India. Therefore, policymakers and businesses need to remain vigilant and continue to take measures to address any potential risks.