India’s Wholesale Price Inflation Rises To Highest In Eight Months
Wholesale inflation in India continued to inch upwards in October as prices of manufactured products rose.
Inflation as measured by the wholesale price index rose to 1.48% in October compared with 1.32% in September, according to data released by the Ministry of Commerce and Industry on Monday.
Last week, data released by the Ministry of Statistics and Program Implementation showed that retail inflation stood at 7.61% in October—the highest since May 2014—compared with 7.27% in September.
The WPI inflation recorded a fairly broad-based quickening, said Aditi Nayar, principal economist at ICRA, adding that this was primarily driven by a jump in the core inflation to an 18-month high of 1.7% in October 2020 from 1% in September 2020. However, food inflation recorded a welcome cooling in October this year, which was only partly base-effect led, she said.
- Primary articles inflation rose 4.74% in October compared to an increase of 5.1% in September.
- Prices of food articles rose 6.37% after growing 8.17% last month.
- Prices of non-food articles rose 2.85% after contracting 0.08% in September.
- Fuel and power index contracted 10.95% against a fall of 9.54% in the preceding month.
- Manufactured products inflation rose 2.12% compared to an increase of 1.61% in September.
The increase in core inflation suggests improvement in demand conditions, after the Covid-related lockdowns were lifted, said Devendra Kumar Pant, chief economist at India Ratings & Research, in an emailed comment.
“However, it will be too early to term this as a general recovery, a large part of this is due to festival related demand. Rising retail food inflation and declined wholesale food inflation is a nightmare for policy makers. India Ratings expects demand to conditions to improve further, however, bigger question is whether increased demand will be sustained after festive season?”