Indian wholesale prices fall 3.48% in May

INDIA’S annual wholesale prices fell for the second consecutive month in May on easing input costs brought about by lower commodity prices, government data showed on Wednesday (Jun 14).

The wholesale price index (WPI) fell 3.48 per cent, compared with a 2.35 per cent fall estimated by economists in a Reuters poll. It fell 0.92 per cent in April.

“The data does not come as a surprise as commodity prices have globally corrected and they have high weightage in WPI,” said economist DK Joshi at CRISIL.

The food index fell 1.59 per cent year-on-year against a rise of 0.17 per cent in April, while fuel and power fell 9.17 per cent compared with rise of 0.93 per cent in the previous month.

Manufactured product prices fell 2.97 per cent in May, the data showed.

Inflation pressure in the South Asian country have shown signs of easing in the past few months.

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This week, annual retail inflation rate cooled to a more than two-year low of 4.25 per cent in May as cost pressure on food eased, moving closer to the Reserve Bank of India’s 4 per cent target.

“WPI will continue to remain negative for next quarter until base effect fades,” Joshi said.

Earlier this month, the central bank kept its key lending rate steady for a second consecutive policy meeting, but signalled that monetary conditions will remain tight for some time as it looks to further curb inflationary pressure. REUTERS