Wholesale inflation surges to 8-month high in December

NEWDELHI: Wholesale prices based inflation surged to an eightmonth high of 2.59% in December, as against 0.58% in November due to sharp rise in prices of food articles like onion and potato. The annual inflation, based on monthly wholesale price index (WPI) was recorded at 3.24% in April 2019. WPI was at 3.46% during December 2018.

Build up inflation rate in the financial year so far was 2.42% compared to a build up rate of 2.92% in the corresponding period of the previous year, as per data released by the office of economic adviser, ministry of commerce and industry on Tuesday.

The rate of price rise for food articles rose to 13.12% during December as against 11% a month earlier, while for non-food articles it rose nearly four-fold to 7.72% from 1.93% in November.

Among food articles, vegetable prices surged by 69.69% mainly on account of onion, which witnessed 455.83% jump in prices, followed by potato at 44.97%.

Onion prices ruled above ₹100 per kg in various markets till recently because of crop damage due to excessive rains. However, prices have started to move southwards with fresh crop arrival and imports. The consumer price index-based retail inflation, as per data released on Monday, spiked to over a fiveyear high of 7.35% in December.

The unexpected jump in inflation diminished the chances of the RBI cutting interest rate at its next monetary policy review due in early February.