Wholesale inflation eased to more than three-year low of 0.33 per cent in September mainly due to falling prices of fuel and certain food articles, according to official data. The wholesale price index-based inflation was 1.08 per cent in August this year and 5.22 per cent in September 2018. The previous low was recorded in June 2016 when wholesale inflation was in negative at 0.1 per cent.
Inflation print for food articles, as a basket, remained nearly flat at 7.47 per cent during the month. Prices of potato fell by a further 22.50 per cent as against a decline of 21.28 per cent in August, the Commerce and Industry Ministry data showed. For fuel and power category, inflation came in at (-) 7.05 per cent, as against (-) 4 per cent in the preceding month. For manufactured products, it slipped to negative territory at 0.42 per cent in September as against no change in prices during August.
"The sequential slide in the WPI inflation to a lower than forecast 0.3 per cent in September 2019, while broad-based, was driven primarily by deeper disinflation in fuel and power, and core WPI. "Only two of the major categories, namely minerals and manufactured food products recorded an uptick in inflation in September 2019, underscoring the relatively benign inflationary conditions at the wholesale level for no food items," said Aditi Nayar, an economist at ICRA.
With the sharp slide in inflation for fruit getting offset by the spike in vegetables, driven by onions, the primary food inflation remained elevated at 7.5 per cent in September 2019, she said. Rahul Gupta, Currency Research Head, Emkay Global Financial Services said RBI prefers looking at CPI print, however, subdued wholesale inflation still keeps RBI rate cut on cards.