As inflation in India continues to show signs of slowing down, the annual rate of inflation based on the Wholesale Price Index (WPI) has dropped to 2.05 percent in March, down from 2.38 percent in February. According to data released by the Ministry of Commerce and Industry, this positive rate of inflation is largely attributed to an increase in the prices of manufactured products.
However, the month-over-month change in WPI for March was in the negative zone at -0.19 percent compared to the previous month of February, indicating a declining trend in inflation. This is largely due to a decline in the prices of food and fuel, resulting in a negative month-over-month inflation rate.
The Reserve Bank of India (RBI) has also revised its inflation forecast for 2025-26 to 4 percent, down from 4.2 percent earlier. RBI Governor Sanjay Malhotra attributed this to a positive outlook for food inflation, with uncertainties regarding rabi crops largely abated and the country expecting a record wheat production and higher production of key pulses compared to last year.
Malhotra noted that robust kharif arrivals and a possible record wheat production would set the stage for a durable softening of food inflation, while a sharp decline in inflation expectations would help anchor inflation expectations going forward. The fall in crude oil prices also bodes well for the inflation outlook, Malhotra added.
However, the RBI Governor also warned of looming uncertainties in global markets and the potential for adverse weather-related supply disruptions, which could pose upside risks to the inflation trajectory. Nonetheless, assuming a normal monsoon, the RBI has projected CPI inflation for 2025-26 at 4.0 percent, with quarterly targets ranging from 3.6 percent in Q1 to 4.4 percent in Q4.
With the risks to the inflation forecast evenly balanced, the RBI is likely to keep a close eye on market developments and economic indicators to ensure that inflation remains within its target range. As the global economy continues to navigate a complex landscape, India’s policymakers will need to be nimble and responsive to emerging trends and challenges to ensure sustained economic growth and stability.
Original Source: https://theshillongtimes.com/2025/04/15/indias-wpi-inflation-declines-to-2-05-pc-in-march/
Category : NATIONAL,News Alert
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Publish Date: 2025-04-15 14:10:00
