NEW DELHI: Inflation based on wholesale price index (WPI) inched up to 0.7% in December, compared with 0.3% in the previous month and 5% a year ago, driven by an increase in food prices.
This was the second straight month of wholesale inflation staying in the positive terrain but was well shy of the 5.7% reading for retail inflation. The inflation, as measured by Wholesale Price Index, was in the negative zone from April to October and the latest estimate is the highest in nine months.
Apart from food, commerce and industry ministry attributed the rise in the rate of inflation to higher prices for machinery & equipment, other manufacturing, other transport equipment and computer and electronics & optical products, among others.
“WPI inflation remains benign at 0.7% for December. The number has been kept low by negative inflation in the category of manufactured goods which has a weight of 64.2% and fuel with 13.1%. These two categories witnessed negative inflation of 0.7% and 2.4% respectively,” said a Bank of Baroda report.
The rate of inflation based on WPI Food Index increased from 4.7% in November, 2023 to 5.4% in December, 2023.
Among food articles, vegetables (26.3%), pulses (19.6%) and paddy (10.5%) contributed significantly to wholesale inflation in December, 2023. Within vegetables, onion witnessed a 91.8% rise in prices. Potato prices continued to contract (-24.1%) in December.
“…Looking ahead, the early data for January 2024 depicts a sequential fall in domestic prices of most food items, as well as a softening in global commodity prices. ICRA projects the WPI inflation to rise marginally owing to the base effect, but remain below 1% in January 2024 (+4.8% in January 2023), and print at sub-1.5% levels in February-March 2024, unless there is a sharp increase in global commodity prices,” ratings agency ICRA said.
This was the second straight month of wholesale inflation staying in the positive terrain but was well shy of the 5.7% reading for retail inflation. The inflation, as measured by Wholesale Price Index, was in the negative zone from April to October and the latest estimate is the highest in nine months.
Apart from food, commerce and industry ministry attributed the rise in the rate of inflation to higher prices for machinery & equipment, other manufacturing, other transport equipment and computer and electronics & optical products, among others.
“WPI inflation remains benign at 0.7% for December. The number has been kept low by negative inflation in the category of manufactured goods which has a weight of 64.2% and fuel with 13.1%. These two categories witnessed negative inflation of 0.7% and 2.4% respectively,” said a Bank of Baroda report.
The rate of inflation based on WPI Food Index increased from 4.7% in November, 2023 to 5.4% in December, 2023.
Among food articles, vegetables (26.3%), pulses (19.6%) and paddy (10.5%) contributed significantly to wholesale inflation in December, 2023. Within vegetables, onion witnessed a 91.8% rise in prices. Potato prices continued to contract (-24.1%) in December.
“…Looking ahead, the early data for January 2024 depicts a sequential fall in domestic prices of most food items, as well as a softening in global commodity prices. ICRA projects the WPI inflation to rise marginally owing to the base effect, but remain below 1% in January 2024 (+4.8% in January 2023), and print at sub-1.5% levels in February-March 2024, unless there is a sharp increase in global commodity prices,” ratings agency ICRA said.