July WPI Inflation stays in negative zone but rises to -1.36% as food prices shoot up

The wholesale price based inflation remained in the negative territory for the fourth straight month in July at (-)1.36 per cent on easing prices of fuel, even though food articles turned costlier. This is significantly higher than the -4.12% reported in June.

"Decline in the rate of inflation in July, 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products," said the Commerce and Industry ministry.

The food inflation shot up 14.25% in July against 1.32% in June. The inflation in primary articles was considerably higher at 7.57% as compared to July last year. As compared to June 2023, the inflation in this category was 8.05%. Primary articles in WPI includes Minerals, food particles and vegetables.

The all commodity index of the WPI rose 1.95% Month-On-Month in July while the food index was up 7.13%. Within vegetables, the index of tomatoes was up an astonishing 307% month-on-month. On the whole, vegetable inflation -which measures the change in price compared to the same month last year - rose to 62.12% in July from -21.98% in June.

The Reserve Bank of India (RBI) last week kept interest rates unchanged at 6.5% for the third straight meeting but signalled tighter policy if food prices drive inflation higher.