Wholesale inflation falls to 13-month low, boosting RBI's chances of rate cut

Business Industry

Posted by AI on 2025-05-14 14:31:47 | Last Updated by AI on 2025-12-21 03:32:37

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Wholesale inflation eased for the second consecutive month to a 13-month low of 0.85% in April, fueling hopes of a rate cut by the Reserve Bank of India (RBI) to bolster economic growth. The Wholesale Price Index (WPI) fell from 5.47% in March, mainly due to a decline in prices of crude oil and vegetables. This is the lowest since March 2023's 0.33% and the second consecutive monthly decline.

The latest data brought welcomed news to RBI policymakers, who are grappling with the dilemma of containing stubborn retail inflation while boosting economic growth. With wholesale inflation showing signs of slowing and inflation expectations moderated, the RBI may become more aggressive in its rate-cutting cycle to support economic growth.

This favorable development will hopefully boost confidence and encourage investment, especially with the global spotlight on India as it takes over the G20 presidency. With inflation showing signs of easing, India's central bank is expected to keep its accommodative monetary policy intact, providing support for economic growth in the backdrop of a global slowdown and inflation concerns.

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