India's Wholesale Price Index Reveals Ongoing Deflation Trend in September

The Indian government has unveiled the latest data on the Wholesale Price Index (WPI) for September, indicating a continuation of the ongoing deflation trend. On Monday, October 16, the government disclosed that the wholesale inflation rate stood at -0.26 percent, marking the sixth consecutive month of negative inflation. In August, the inflation rate was -0.52%, while in July, it was as low as -1.36%.

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The Indian government has unveiled the latest data on the Wholesale Price Index (WPI) for September, indicating a continuation of the ongoing deflation trend. On Monday, October 16, the government disclosed that the wholesale inflation rate stood at -0.26 percent, marking the sixth consecutive month of negative inflation. In August, the inflation rate was -0.52%, while in July, it was as low as -1.36%.

This deflationary trend for September was primarily attributed to declines in the prices of chemical products, basic metals, mineral oil, textiles, and food products compared to the same month in the previous year. The Wholesale Price Index, also known as WPI, focuses on monitoring changes in prices for goods transacted in bulk by wholesale businesses. Unlike the Consumer Price Index (CPI), which reflects the costs of goods and services purchased by consumers, WPI tracks factory gate prices before retail pricing.

The core inflation rate for September showed an improvement, standing at -1.4%, compared to August's -2.2%. Some notable changes were observed in specific sectors. Crude petroleum and natural gas experienced a significant price increase of 10.31%, along with non-food articles rising by 0.86% from August to September 2023. On the contrary, the prices of minerals dropped by -4.92%, and food articles saw a substantial decrease of -6.46% during the same period.

In addition, mineral oil prices saw a noticeable upturn of 3.67% in September, with electricity prices also rising by 0.51% month-on-month. However, coal prices witnessed a slight decline of -0.65% compared to the previous month.

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Analyzing the data in more detail, out of the 22 National Industrial Classification (NIC) two-digit groups for manufactured products, 14 groups experienced price increases. These included basic metals, transport equipment, fabricated metal products, machinery, and equipment, as well as rubber and plastic products. On the other hand, eight groups saw a decrease in prices, with motor vehicles, trailers, semi-trailers, electrical equipment, leather and related products, and chemical products being notable examples of those that faced a decrease in prices.

This comprehensive report sheds light on India's economic conditions, particularly in the wholesale market, and highlights the ongoing challenges faced by various sectors due to fluctuating prices and deflationary pressures.