The decline in grocery prices, shown by government data released on Friday, eased the inflation of wholesale prices slightly in January.
Wholesale Price Index (WPI)-based inflation was 2.37% in December 2024. It was 0.33% in January 2024.
According to data, food inflation in January eased to 5.88% in January, compared to 8.47% in December 2024. Vegetable inflation fell sharply to 8.35% compared to 28.65% in December 2024.
In eggs, inflation in the meat and fish category fell to 3.56% compared to 5.43% last month.
Within vegetables, tomato prices fell to 18.9%, but potato inflation continued to be at 74.28%, while onions surged to 28.33% in January.
The fuel and electricity category is against 2.78% deflation in January and 3.79% deflation in December. For manufactured items, the inflation rate was 2.51% compared to 2.14% in December 2024.
Retail inflation data released Wednesday showed that consumer price index (CPI)-based inflation eased food prices to a five-month low of 4.31% in January.
“Even though we expect to see a cooling of the food segment prints, we projected WPI to 2.4% in 2025 and another 3% in 2026,” said Rahul Agrawal, senior economist at ICRA. We’ll increase it.”
According to Rajani Singha, chief economist in care assessments, seasonal revisions to prices could ease food prices in the coming months.
However, as far as global product prices go, there are headwinds. Their prices have hardened amid growing uncertainty regarding the impact of US protectionist trade policies. This creates upward pressure on the WPI non-food components.
Going ahead, Sinha said it is important to closely monitor geopolitical development and global trade uncertainty.
Moreover, depreciation of rupees puts the cost of imports and increases the risk of import inflation.
The rupee has been depreciated by about 4% against the US dollar so far in the second half of this year.
Earlier this month, RBI reduced its policy rate to 6.25% at 25 basis points to drive consumption. Interest rate cuts occurred after a five-year gap. RBI last lowered its rate in May 2022.
The April 2025 monetary policy lawsuit relies on factors such as currency movements and system liquidity, said Pallas Jasrai, senior analyst India, assessment and study.
