Wholesale deflation in the country was recorded at 0.58 per cent in July — the lowest level of inflation in two years, official data showed on Thursday. This marks a second straight month of wholesale deflation.
Measured by the Wholesale Price Index and also known as headline inflation, wholesale inflation is the rate of increase in the wholesale prices of select items. A negative reading of the Wholesale Price Index indicates wholesale deflation — also known as negative inflation.
The latest reading comes days after separate official data showed domestic consumer inflation hit an eight-year low of 1.55 per cent in July.
In the fuel and power category, wholesale deflation changed to 2.43 per cent in July from 2.65 per cent in the previous month.
Food deflation — measured by the WPI Food (WPI-F) index — came in at 2.15 per cent in July, versus 0.26 per cent in the previous month.
Manufacturing product inflation worsened to 2.05 per cent in July from 1.97 per cent in June.
In the primary article group, WPI deflation came in at 4.95 per cent last month, as against 3.38 per cent in June.
Core inflation — or inflation excluding volatile items like food and energy — was recorded at 1.1 per cent in July, rising by 10 basis points (bps) from 1.0 per cent in June.
A core inflation reading gives a more stable and accurate reading of inflation over a period of time by stripping out categories known for sharp, short-term price swings.
ALSO READ | Repo rate vs Loan EMI: How future RBI repo rate cuts may impact your home, auto and personal loan EMIs
Inflation and RBI
The Reserve Bank of India governor-led Monetary Policy Committee targets to contain consumer inflation within 2 per cent of a medium-term target of 4 per cent.
It tracks retail inflation data primarily to formulate its monetary policy.
ALSO READ | Rate cut likely in next RBI MPC meet amid global developments: Morgan Stanley
