WPI inflation rises to 8-month high of 1.48% on pharma, metal prices

Administrator_India | November 17, 2020 | 0 | ECONOMIC NEWS

By Administrator _India

Capital Sands

The wholesale price index-based (WPI-based) inflation rate rose for the third straight month to an eight-month high of 1.48 per cent in October from 1.32 per cent in the previous month.

Economists said the WPI data enforced the case for the status quo in the Reserve Bank of India’s policy rates.

Unlike its consumer price index (CPI) counterpart, pressure did not come from food items in general.

These were manufactured products, particularly pharma and metals, that fuelled the WPI inflation rate.

Economists attributed it to a rise in demand due to festivals and after unlockdown was announced for more sectors from September onwards.

The food inflation rate in the WPI came down to 6.37 per cent in October from 8.17 per cent in the previous month.

It rose to 11.07 per cent from 10.68 per cent over the same period in the CPI.

Aditi Nayar, principal economist at ICRA, said the WPI data did not reveal any information that would build the case for a rate cut in December.

The WPI inflation rate in vegetables fell to 25.23 per cent from 36.54 per cent. However, onions saw prices increasing in October after a continuous fall for the previous four months. The rate for onions stood at 8.49 per cent in October against a deflation (fall in prices) rate of 31.64 per cent in the previous month. Prices of potatoes continued to double in October over those of the same month in the previous year.

The inflation rate here rose to 107.70 per cent in October from 107.63 per cent.

Pulses also saw the inflation rate rising from 12.53 per cent in September to 15.93 per cent in October.

Fuel and power saw the deflation rate rising to 10.95 per cent in October from 9.54 per cent in the previous month.

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