WPI in­fla­tion hits 6-mth high in Oct

Hindustan Times ST (Jaipur) - - World - Asit Ran­jan Mishra asit.m@livemint.com

In sync with re­tail price in­fla­tion, In­dia’s whole­sale price in­fla­tion ac­cel­er­ated to a six­month high of 3.59% in Oc­to­ber, from 2.6% a month ago, on the back of ris­ing veg­etable prices.

Veg­etable prices in­creased 36.6% in Oc­to­ber, lead­ing to food in­fla­tion more than dou­bling to 4.3% in the same month.

Fuel in­fla­tion also rose by 10.5% in Oc­to­ber from 9% in Septem­ber as in­ter­na­tional crude oil prices hard­ened.

How­ever, in­fla­tion for man­u­fac­tur­ing items eased to 2.6% in Oc­to­ber from 2.7% a month ago.

Gov­ern­ment data re­leased on Mon­day showed In­dia’s re­tail in­fla­tion quick­ened to 3.58% in Oc­to­ber, the fastest pace in seven months, spurred by ris­ing food and fuel prices, vir­tu­ally rul­ing out the pos­si­bil­ity of an in­ter­est rate cut by the Re­serve Bank of In­dia (RBI) in its 6 De­cem­ber mon­e­tary pol­icy re­view.

“In­fla­tion ris­ing from last month’s lev­els largely on ac­count of food es­pe­cially veg­eta­bles and protein prod­ucts. Hope­fully in­creas­ing trend proves to be sea­sonal and we will con­tinue to have sub-4% in­fla­tion,” eco­nomic af­fairs sec­re­tary Sub­hash Chan­dra Garg tweeted on Tues­day.

RBI has raised its re­tail in­fla­tion tar­get to 4.2-4.6% for the sec­ond half of this fis­cal year from 4-4.5%, re­flect­ing the com­bined im­pact of un­favourable base ef­fects, the up­turn in food prices and the im­pact of the in­crease in house rent al­lowance an­nounced by the cen­tral gov­ern­ment.

In­di­cat­ing the ad­verse macroe­co­nomic im­pact of the rise in crude oil prices, global fi­nan­cial ser­vices com­pany No­mura Hold­ings Inc. said ev­ery $10 per bar­rel rise in the price will worsen In­dia’s re­tail in­fla­tion by 0.6-0.7 per­cent­age points and the cur­rent ac­count bal­ance by 0.4 per­cent­age points of GDP. Crude oil price of the In­dian bas­ket stood at $62.66 per bar­rel on Mon­day

Madan Sab­navis, chief econ­o­mist at Care Rat­ings, said ris­ing global crude oil prices will pres­sur­ize do­mes­tic price lev­els in com­ing months. “Fur­ther, an in­crease in ex­cise duty on trans­port fu­els (petrol & diesel) last month would add to in­fla­tion­ary pres­sure in trans­port fu­els in the com­ing months. We ex­pect WPI in­fla­tion to be around 3.5-4% by the end of the fis­cal year.”

The GST Coun­cil’s de­ci­sion on Fri­day to cut the tax rate on 177 items from 28% to 18%, leav­ing only 50 items un­der the high­est tax slab, is ex­pected to par­tially ease in­fla­tion­ary pres­sure on con­sumers as and when com­pa­nies start cut­ting prices.

NEWDELHI:

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.