India’s wholesale inflation based on the Wholesale Price Index of the month of December 2022 was at 4.95%, against the previous month’s 5.89%, official data showed. In October, it was at 8.39% and has been falling since then. Notably, the Wholesale Price Index (WPI) based inflation had been in double digits for 18 months in a row till September.
The decline in wholesale inflation in December was primarily due to a fall in price of food articles, mineral oils, crude petroleum and natural gas, textiles and chemical products said the Ministry of Commerce and Industry while releasing the inflation data.
India’s retail inflation during the month of December was at 5.72%, data released last week. The latest figures showed a marginal decline and further moderation in retail inflation as compared with the previous month.
RBI, in its fight against rising inflation, had already hiked the key policy rate by 225 basis points since May to 6.25% to cool off domestic retail inflation that stayed above its upper tolerance limit for nearly three quarters. Raising interest rates typically cools demand in the economy, thereby putting a brake on inflation.