India’s wholesale inflation declined to 2.04 percent in July from a 16-month high of 3.4 percent in the previous month, according to data released by the government on August 14.

Wholesale prices were in deflation for a better part of the previous year, with the index in 1.26 percent deflation in July 2023.

The decline in wholesale price index follows the more significant decline in consumer price index below 4 percent for the first time in nearly five years. Data released on August 12 showed that consumer inflation dipped to 3.5 percent compared with 5.1 percent in the previous month, as a high base helped keep inflation contained.

Sequentially, however, prices had risen 1.4 percent in July, with food prices increasing 2.8 percent over the month.

Economists have shifted their rate cut outlook further. The Reserve Bank of India’s Monetary Policy Committee kept the policy rate unchanged at 6.5 percent for the ninth consecutive time at its review meeting in August.

Economists contend that the chances of a rate cut in October also look bleak. Some even contend that a rate cut may come in 2025.