According to recent reports, metal prices are expected to continue their upward trend, which will likely keep pressure on the Wholesale Price Index (WPI) in the coming months. This is stated by the Union Bank of India and reported by The Economic Times and Times of India. The increase in metal prices will likely contribute to a rise in the WPI, which measures the average change in prices of goods and services sold in the wholesale market.
In April, the WPI fell to 0.85%, as reported by NDTV. However, experts believe that this decrease may be short-lived due to the ongoing upward trend in metal prices. The Reserve Bank of India (RBI) may still consider cutting interest rates by another 75 basis points in the fiscal year 2026, as inflation has cooled to multi-month lows, according to The Financial Express.
The current decrease in WPI is seen as a positive sign, with The Indian Express commenting that sustained moderation in inflation is a good low. Experts attribute the decrease in inflation to a combination of factors, including a decline in global commodity prices and a normal monsoon season. However, the upward pressure on metal prices may offset these factors and keep the WPI from decreasing further.
The RBI’s decision to cut interest rates will depend on various factors, including the trajectory of inflation, economic growth, and global economic trends. If metal prices continue to rise, it may limit the RBI’s ability to cut interest rates further, as higher metal prices could contribute to increased production costs and higher inflation.
In conclusion, while the current decrease in WPI is a positive sign, the upward trend in metal prices is likely to keep pressure on the WPI in the coming months. The RBI will need to carefully consider the impact of metal prices on inflation and economic growth when making decisions about interest rates. As the economy continues to evolve, it will be important to monitor the trajectory of metal prices and their impact on the WPI and inflation.