There is good news for the government and the RBI on the inflation front. The wholesale inflation figures for the month of July have been released, according to which the wholesale inflation rate has come down to 2.04 per cent in the last month, which may be a reason to heave a sigh of relief for the RBI and the government. In the previous month i.e. June, the wholesale inflation rate was 3.36 per cent, the highest level in 16 months.
Wholesale price inflation falls to 2.04 percent in July, down from 3.36 percent in June: government data
— Press Trust of India (@PTI_News) August 14, 2024
The wholesale inflation rate was lower than expected
Reuters had estimated that India’s wholesale inflation rate could be 2.39 percent in July and the actual figure could be lower. Its effect can likely be seen in the Reserve Bank’s upcoming monetary policy decisions and the RBI could also think of cutting its interest rates. Controlling inflation had been a challenge for the government for a long time.
Inflation rose here
The inflation rate of primary articles decreased to 3.08 percent in July from 8.80 percent in June. An increase was observed in the inflation rate of the fuel and energy segment and it reached 1.72 percent from 1.03 percent in June. The inflation rate in the manufactured products segment also increased. The wholesale inflation rate of manufacturing products stood at 1.58 percent in July from 1.43 percent in June.
In the data released on Monday, August 12, retail inflation stood at 3.54 percent. This has been its lowest level in 59 months or 5 years. The RBI got the first relief because in the base data of inflation rate, CPI inflation or retail inflation rate has more weightage than wholesale inflation. The Reserve Bank Governor also said in his latest policy that in order to achieve the inflation target set by the RBI (4 percent), it is important to keep an eye on the data for the remaining months of this year primarily.
