WPI Inflation At Its Highest Since 1991
India’s wholesale inflation spiked led by a rise in prices of food, fuel and power, hitting the highest since liberalisation.
Inflation as measured by the Wholesale Price Index stood at 14.2% in November on an annual basis, compared with a rise of 12.5% in October, according to data released by the Ministry of Commerce and Industry on Tuesday.
The gauge rose 2.7% over the preceding month in November. That's against a month-on-month increase of 1.2% in October.
Retail inflation was at a three-month high in November.
Headline and core WPI inflation hit all-time highs in November, Aditi Nayar, chief economist at ICRA Ltd., said. Fuel and power inflation also printed at all-time high levels.
The unseasonal surge in vegetable prices as well as a rise in the inflation for egg, meat and fish, and condiments and spices, pushed primary food inflation to a 13-month high, she said.
An unfavourable base is likely to push up the inflation rate for primary food articles further in the current month, despite an anticipated sequential moderation in prices of various food items, according to Nayar.
The primary reason for this was food inflation, which surged to 6.7% in November from 3.1% in October. Commodities that drove the rise were cereals (4% in November versus 3.2% previous month), fruits and vegetables (7.4% vs -10.3%), and eggs, meat and fish (9.7% vs 2%).DK Joshi, Chief Economist, CRISIL
WPI Inflation Internals (Year-On-Year)
Inflation in manufactured products—the largest component of the index—eased to 11.92% compared with a rise of 12.04% in October.
Year-on-year, primary articles inflation stood at 10.34% compared with a rise of 5.2% in October.
Inflation in food articles rose to 4.9%, compared to -1.7% in the previous month.
Vegetables inflation rose to 3.9%, compared to -18.5% in the previous month.
Inflation in non-food articles was at 13.8%, compared to 18.41% in September.
Fuel and power inflation rose to 39.8%, compared to 37.2% in October.
Core inflation climbed to a fresh high of 12.3% in November 2021, said Sunil Kumar Sinha, principal economist at India Ratings & Research. This was the fifth successive month in which they have remained in excess of 11%. "Sticky core inflation indicates that manufacturers are increasingly passing on the higher input costs to their output prices despite uneven recovery in demand," Sinha said.