Wholesale inflation falls to 2.6% in September

Macroeconomic numbers show uptick; economists wait for trend to emerge

The Wholesale Price Index (WPI)-based inflation data released on Monday provided yet another indicator of improving macroeconomic parameters. Wholesale inflation fell to 2.60 per cent in September, from 3.24 per cent in August, due to subdued rate of price rise in food items, particularly vegetables. However, economists warned that data of a few more months would have to be analysed to come to any conclusion on macroeconomic improvement.

The Wholesale Price Index (WPI)-based inflation data released on Monday provided yet another indicator of improving macroeconomic parameters.

Wholesale inflation fell to 2.60 per cent in September from 3.24 per cent in August due to a subdued rate of price rise in food items, particularly vegetables. However, economists warned that data of a few more months would have to be analysed to come to any conclusion on macroeconomic improvement.

Though food inflation declined to 2.04 per cent, against 5.75 per cent in August, the rate of price rise in onions was elevated. Despite moderation, inflation in onions stood at 79.78 per cent against 88.46 per cent. Otherwise, inflation in vegetable prices cooled to 15.48 per cent in September, against a high of 44.91 per cent in the previous month.

Inflation in manufactured products witnessed a slight increase at 2.72 per cent, against 2.45 per cent in August.

Fuel and power inflation cooled to 9.01 per cent, against 9.99 per cent in August.

Aditi Nayar, principal economist with ICRA, said a favourable base effect aided moderation in inflation on fuel and power, despite the recent rise in prices of petrol, diesel, aviation turbine fuel and other fuels. “Initial data has placed the index for crude petroleum at 55.6 points for September 2017, only 1 per cent higher than the level for June 2017, despite the 17 per cent increase in the average price of the Indian crude oil basket in the rupee terms during this time period. There is a possibility that inflation for September 2017 would subsequently be revised higher on account of crude oil," she said.

The inflation number would provide a boost to those claiming macroeconomic numbers were on the upswing now.