Wholesale Price Index Dips Significantly

NEW DELHI: In a surprising turn of events, India's wholesale price inflation has plummeted to a 13-month low in April, primarily due to a decrease in prices of food, fuel, and manufactured products. This development fuels expectations of a potential interest rate cut by the Reserve Bank of India (RBI) in its upcoming June policy review.

Sharp Decline in Inflation Rates

According to data released by the commerce and industry ministry, the inflation rate, as measured by the wholesale price index, sharply declined to 0.9% in April, down from 2.1% in March. Notably, the annual inflation rate based on the WPI Food Index also saw a significant drop from 4.7% in March to 2.6% in April.

Vegetable and Fuel Prices Lead the Drop

Vegetable prices experienced an 18.3% fall, with potato prices dropping by 24.3%. Additionally, the inflation in the fuel and power group decreased by 2.2%, contributing to the overall decline in the wholesale price index.

Positive Outlook on Food Inflation

"Encouraging prospects for agricultural production, the arrival of the fresh Rabi harvest, and comfortable reservoir levels are positives for food inflation," commented Rajani Sinha of CareEdge, highlighting the potential for continued relief in food prices.