The wholesale price-based inflation declined to a 22-month low of 4.95 per cent in December 2022, mainly due to fall in prices of food articles, especially vegetables, on easing supply side pressure and a higher base of last year.
This is the seventh straight month of declining Wholesale Price Index (WPI)-based inflation.
It was 5.85 per cent in November 2022 and 14.27 per cent in December 2021.
Even though declining prices of vegetables and onions pulled down inflation rate of food articles, wheat, pulses and potato remained expensive, along with protein-rich items like milk and 'egg, meat and fish'.
Inflation in food articles during December 2022 was (-)1.25 per cent. Inflation in vegetables and onion was (-)35.95 per cent and (-)25.97 per cent, respectively.
In non-food articles, oilseeds and minerals too recorded a decline in inflation by 4.81 per cent and 2.93 per cent, respectively.
"The decline in the rate of inflation in December 2022 is primarily contributed by fall in prices of food articles, mineral oils, crude petroleum & natural gas, food products, textiles and chemicals & chemical products," the commerce and industry ministry said in a statement.
The last low level of WPI inflation was recorded in February 2021 at 4.83 per cent.
The deceleration in WPI comes in line with retail inflation data released last week, which showed CPI inflation eased to 5.72 per cent in December. The consumer price index (CPI)-based inflation remained within the RBI's upper tolerance limit of 6 per cent for the second month in a row.
India Ratings and Research Principal Economist Sunil Kumar Sinha said easing of supply side pressure, especially with respect to fruits and vegetables, along with a favourable base effect helped in moderation of wholesale inflation.