At 2.36%, WPI inflation rises to 4-month high
India’s wholesale price index (WPI)-based inflation rose to a four-month high of 2.36 per cent in October due to rising food prices, as per the Ministry of Commerce and Industry’s provisional data released on Thursday. In June, the WPI was at 3.43 per cent.
Expect moderation: RBI
India’s economic growth remains resilient, inflation is expected to moderate despite periodic humps; the external sector is robust... our endeavour has been to seize every opportunity to further strengthen our fundamentals through prudent policy approach. — Shaktikanta Das, governor, Reserve Bank of India
Inflation last month was primarily was driven by the rise in the cost of essentials, particularly food articles. It was further driven by rising costs related to the manufacture of food products, equipment and motor vehicles — trailers and semi-trailers.
Experts are of the view that inflation related to manufacturing would continue on its upward trajectory, however, Kharif harvest is projected to increase supply of food items. “Better harvest shall ease food-supply concerns. Fuel inflation remaining in negative territory has been a positive, containing the spread of inflation across categories,” Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers, said.
Food index rose by 11.59 per cent annually, compared to a 9.47 per cent gain in September and 3.21 per cent in August. Elevated food prices have also pushed India’s retail inflation, based on the consumer price index (CPI), for the month, to a 14-month high of 6.21 per cent.
The rise was led by vegetables and fruits, whose prices rose by 63.04 per cent and 13.55 per cent year-on-year, respectively. On the other hand, prices of non-food articles declined 1.71 per cent annually, in the month, compared to a 1.64 per cent decline in September. However, fuel and power prices fell 5.79 per cent annually in October, compared to a 4.05 per cent annual decline in September. Also crude petroleum and natural gas prices fell by 12.16 per cent annually in October, against the 13.04 per cent annual contraction reported the previous month. Manufactured products’ prices rose 1.5 per cent annually in October.
