According to the government data released on Tuesday, the Wholesale Price Index (WPI) based inflation rate dropped for the ninth consecutive month to 3.85 percent in February. This is attributed to the decline in prices of manufactured goods and fuel and power.

In January, the inflation rate was 4.73 percent, while it was 13.43 percent in February 2022. However, inflation in food articles rose to 3.81 percent in February, up from 2.38 percent in January. The decline in the rate of inflation is mainly due to a fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment, and motor vehicles, trailers & semi-trailers. In February 2023, inflation in pulses was 2.59 percent, while in vegetables it was (-)21.53 percent. The inflation rate for oil seeds was (-)7.38 percent. The inflation rate for the fuel and power basket eased to 14.82 percent in February from 15.15 percent in the previous month, while in manufactured products it was 1.94 percent, down from 2.99 percent in January.

This deceleration in WPI aligns with the dip in retail inflation, which was released on Monday. Retail inflation based on the consumer price index declined to 6.44 percent in February from 6.52 percent in January. The Reserve Bank of India had raised the key interest rate by 25 basis points to 6.50 percent in its monetary policy review last month, stating that core inflation still remains sticky.