India’s Wholesale Inflation Eases To Six-Month Low Of 2.05% In March

India’s wholesale inflation eased to a six-month low of 2.05% in March from 2.38% in February. This decline was driven by a broad-based fall in prices across most categories. The wholesale price index dropped 0.19% from the previous month.

The primary articles index declined 1.07% sequentially to 184.6 in March, mainly due to softer prices of crude petroleum and natural gas. The fuel and power index also fell 0.91% to 152.4. However, the index for manufactured products, which carries the most weight in the WPI basket, rose 0.42% to 144.4.

WPI food inflation eased to 4.66% in March from 5.94% in February. The index for food items decreased slightly to 188.8 from 189.0 in the previous month.

The Reserve Bank of India primarily uses retail inflation as the key metric for its monetary policy decisions. However, wholesale inflation often feeds into retail inflation with a lag. While not a direct predictor, WPI can sometimes hint at the direction of retail inflation, despite the differing weights assigned to various items in the two indices.