Wholesale price index-based inflation fell to a two-year low of 4.73 per cent in January on easing prices of manufactured items, fuel and power even as food articles turned expensive.

With the decline last month, WPI inflation fell for the eighth straight month: it was 4.95 per cent in December and 13.68 per cent in January last year.

“Decline in the rate of inflation in January 2023 is primarily contributed by mineral oils, chemicals and chemical products, textiles, crude petroleum and natural gas, textiles and food products,” the commerce and industry ministry said on Tuesday.

The decline in the rate of price rise was mainly because of a favourable base effect, economists said, adding softening commodity prices would help to ease WPI inflation further.

Primary articles inflation rose to 3.9 per cent in January. Manufacturing inflation fell to 3 per cent and fuel and power inflation to 15.2 per cent.

In primary articles, prices of foodgrains, fruits, milk and non-food articles rose, while vegetable prices fell. The inflation of food grains was led by wheat which rose to 23.63 per cent and cereals which jumped 15.46 percent.

Sunil Sinha, principal economist, India Ratings and Research, said core inflation declined to a 26-month low of 2.8 per cent because of lower input costs especially of commodities.

“Wholesale inflation will cool off further to 3.7 per cent in February 2023 because of a high base effect and softening of global commodity prices.”

Bank of Baroda chief economist Madan Sabnavis said WPI inflation may be expected to trend further downwards in the next two months and could end closer to 4 per cent by March.