WPI in­fla­tion at 6-mth high of 3.59% on costlier food, fuel

The Hitavada - - BUSINESS -

IN­FLA­TION, based on whole­sale rates, shot up to a 6-month high of 3.59 per cent in Oc­to­ber as prices of food items and fuel rose sharply. As per the Whole­sale Price In­dex (WPI), in­fla­tion was 2.60 per cent in Septem­ber.

In Oc­to­ber last year, it was 1.27 per cent. The in­fla­tion fig­ure for Oc­to­ber this year is the high­est since April, when it was at 3.85 per cent. The Gov­ern­ment data re­leased on Tues­day showed that in­fla­tion in food ar­ti­cles more than dou­bled to 4.30 per cent in Oc­to­ber. In case of onion, it sky­rock­eted to 127.04 per cent, while for veg­eta­bles it was 36.61 per cent. In the egg, meat and fish seg­ment, the rate of price rise was 5.76 per cent.

ICRA Prin­ci­pal Econ­o­mist, Aditi Na­yar said the spike in WPI in­fla­tion was broad-based, led by veg­eta­bles, fruit, crude oil, nat­u­ral gas, fu­els, min­er­als and elec­tric­ity. “The sharper-than-an­tic­i­pated uptick in the WPI in­fla­tion re­in­forces our ex­pec­ta­tion of a sta­tus quo in the up­com­ing mon­e­tary pol­icy re­view,” Na­yar said.

The Re­serve Bank of In­dia is sched­uled to come out with its next mon­e­tary pol­icy re­view on De­cem­ber 6. In­fla­tion in man­u­fac­tured prod­ucts saw a slight dip to 2.62 per cent, as against 2.72 per cent in Septem­ber.

In the fuel and power seg­ment, it rose to 10.52 per cent, as against 9.01 per cent in Septem­ber.

Fuel in­fla­tion has re­mained high for the past three months as petrol and diesel prices con­tin­ued to rule high, track­ing global crude oil rates. Power tar­iffs shot through the roof on lower do­mes­tic pro­duc­tion. In­dus­try cham­ber As­socham said the con­tin­u­ous in­crease in petrol and diesel prices must be taken care of by pol­i­cy­mak­ers since it may have im­pact on the im­port bill and, sub­se­quently, on ex­change rates.

“It may also have a neg­a­tive im­pact on in­put prices for the in­dus­try which has al­ready started to feel pres­sure on its profitabil­ity,” it added.

Pulses con­tin­ued to wit­ness de­fla­tion at 31.05 per cent. Like­wise, in potato de­fla­tion was at 44.29 per cent and wheat at 1.99 per cent in Oc­to­ber.

As per the Con­sumer Price In­dex (CPI) data re­leased yes­ter­day, re­tail in­fla­tion for Oc­to­ber rose to a 7-month high of 3.58 per cent on costlier food items, es­pe­cially veg­eta­bles.

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