Millennium Post

Wholesale inflation slows to 0.16% in Oct

New Delhi: Wholesale inflation slipped to about three-and-a-half-year low of 0.16 per cent in October on account of a decline in prices of manufactured goods though food products remained dearer, government data showed on Thursday.

The previous low was in June 2016 when the Wholesale Price Index (WPI)-based inflation was a negative 0.1 per cent.

In September this year, the WPI-based inflation was at 0.33 per cent, while it stood at 5.54 per cent in October 2018.

The rate of price rise for food articles was 9.80 per cent during the month, while for non-food articles it stood at 2.35 per cent, showed the latest data released by the commerce and industry ministry.

The wholesale inflation in potato remained in the negative zone at 19.60 per cent (from -22.50 per cent in September).

However, for vegetables, the inflation jumped to 38.91 per cent in October from 19.43 per cent a month ago, while that for pulses, it remained elevated at 16.57 per cent as compared with 17.94 per cent.

For fruits, it eased to 2.72 per cent during the month as against 6.67 per cent in September. While wholesale inflation in manufactured products was (-)0.84 per cent in October 2019.

"The sequential dip in the WPI inflation in October 2019 was led by core items, fuel and power, minerals, and crude petroleum and natural gas, whereas inflation for primary food and non-food articles, and manufactured food products recorded an uptick," said Aditi Nayar, economist at ICRA.

Among other articles, in the WPI basket, the inflation for the fuel and light category declined further to -8.27 per cent.

Rahul Gupta, currency research head, Emkay Global Financial Services, said, "The data in wholesale prices signals that there is still lack of demand in segments such as manufacturing, metals, and chemical products. While only a surge in vegetable prices led to a rise in WPI from the market forecast. The continued weakness in WPI along with slowing growth will induce the RBI (Reserve Bank of India) to cut repo rate again in December."

The retail inflation for the month hit a 16-month high of 4.62 per cent due to soaring prices of food articles, including fruit and vegetables, according to data released by the Ministry of Statistics and Programme Implementation on Wednesday. The RBI takes into account the retail inflation data to decide on its bi-monthly monetary policy announcement, which is due early next month.

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