Inflation Dips to 7.80% Amid Decline in Food Prices

Strategic Insights -

In a welcome relief for Indian consumers, inflation took a breather last week, dropping to 7.80% from 7.87% the previous week. The decline was primarily driven by a slowdown in food prices, particularly vegetables and fruits, which have become cheaper. The Wholesale Price Index (WPI) inflation has now fallen below 8% for the first time in several months. This comes as a respite for households, who have been grappling with rising prices. Market experts believe that inflation may continue to ease in the coming weeks, thanks to the Reserve Bank's decision to hike the Cash Reserve Ratio (CRR).

Key Takeaways:

  • Inflation dipped to 7.80% in the week ended September 18, down from 7.87% the previous week, primarily due to cheaper food items.
  • The point-to-point Wholesale Price Index (WPI) inflation fell to 7.80% from 7.87% the previous week.
  • Food prices, particularly vegetables and fruits, have become cheaper, leading to a decline in inflation.
  • Market experts predict that inflation may ease in the coming weeks, thanks to the Reserve Bank's CRR hike.
  • The WPI increased by 0.1% to 189.3 points, with fuel prices remaining unchanged for the second week.
  • The OPEC's decision to boost oil supplies by 1 million barrels per day from November 1 is expected to ease pressure on global markets.

Statistics:

  • Inflation dipped to 7.80% in the week ended September 18.
  • The Wholesale Price Index (WPI) inflation fell to 7.80% from 7.87% the previous week.
  • Fuel prices remained unchanged for the second week.
  • The WPI increased by 0.1% to 189.3 points.
  • The point-to-point inflation rate for the current week is 7.80%, down from 7.87% the previous week.
  • The year-on-year inflation rate is 5.02%.

Sources:

  • "Asia Pulse", New Delhi, October 4, 2020.
  • PTI, October 4, 2021.