Wholesale inflation cools down to -2.65%

New Delhi: Wholesale inflation in April cooled further to -2.65%, compared to 5.55% in the same period last year, government data showedon Thursday. In March, wholesale price index (WPI) stood at -2.33%.

This is the sixth straight fall in WPI inflation, mainly on the back of plunging oil prices.
 
Although, the Reserve Bank of India (RBI) mainly monitors inflation based on consumer prices, the positive wholesale data comes as a shot in the arm for India Inc, which has been making a case for further rate cuts by the central bank.
 
Earlier this week, data showed retail inflation cooled to a four-month low in April on slower annual increases in food costs and industrial output growth slipped to a five-month low in March, boosting odds for an interest rate cut by the central bank next month.
 
The rate of inflation in food articles stood at 5.73% in April as against 6.31% in March, 7.83% in February and 8% in January. 
 
The data released by Ministry of Commerce and Industry said, “The index for ‘Food Articles’ group rose by 1.3% due to higher price of fruits & vegetables, gram and tea (4% each), poultry chicken and urad (3% each), arhar, ragi and fish-marine (2% each) and bajra and jowar (1% each).”  
 
With inflation staying well below the 6% upper end of the RBI’s target range and growth momentum weakening, analysts are expecting the central bank to lower lending rates for a third time this year.

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