NEW DELHI: India’s wholesale price index (WPI)-based inflation went up to 2.37 per cent in December from 1.89 per cent in November 2024, primarily due to increase in prices of food articles, manufacture of food products, other manufacturing, manufacture of textiles and non-food articles, etc, data released by the Ministry of Commerce and Industry showed on Tuesday. During December 2023, WPI inflation was at 0.73 per cent and in October this year, it was at 2.36 per cent.
The month over month change in WPI for the month of December 2024 stood at (-)0.38 per cent as compared to November, 2024.
The month-over-month data released by the Ministry of Commerce and Industry showed that the index for primary articles decreased by 2.07 per cent to 193.8 (provisional) in December from 197.9 (provisional) for the month of November, 2024. The index for Fuel & Power increased by 1.90 per cent to 149.9 (provisional) in December from 147.1 (provisional) for the month of November. The manufactured products index remained the same as November, at 143.0 (provisional) for the month of December, 2024.
Furthermore, per the release by the Ministry of Commerce & Industry, inflation for food articles eased to 8.47 per cent in December as compared to 8.63 per cent in November. The inflation rate for primary articles rose to 6.02 per cent from 5.49 per cent in the previous month. The fuel and power inflation was at -3.79 per cent in December as compared to -5.83 per cent in November. And manufactured products inflation went up to 2.14 per cent from 2.00 per cent in November.
Under the food articles category, vegetable inflation went up marginally to 28.65 per cent in December, from 28.57 per cent in November. Pulses inflation during the month of December was at 5.02 per cent, while the inflation for wheat came in at 7.63 per cent during the month in review. Eggs, Meat & Fish inflation came in at 5.43 per cent. Potato and onion reported inflation at 93.20 per cent and 16.81 per cent respectively. Onion witnessed a drastic rise from 2.85 per cent inflation in November.
The non-food articles reported WPI inflation at 2.46 per cent in December as against -0.98 per cent in November. Minerals inflation came in at 5.47 per cent in December, down from 5.89 per cent in November. The Crude Petroleum & Natural gas posted wholesale inflation at -6.77 per cent in December and crude petroleum was at -6.86 per cent.
Reacting on this, Rahul Agrawal, Senior Economist, ICRA Limited, said, “The uptick was led by the fuel and power and primary non-food articles, which together accounted for as much as 42 bps of the 48 bps increase in the headline print between these months. The WPI food inflation remained unchanged at 8.9 per cent in December 2024 vis-à-vis November 2024. The prices of major vegetables, such as tomato, onion and potato, have declined quite sharply on a sequential basis in January 2025 so far. However, the relatively lower weight of vegetables in the WPI vis-à-vis the CPI, would limit the benefits on this account to the headline WPI inflation in the month. Moreover, the import duty hikes on most varieties of edible oil that were undertaken in mid-September 2024, are expected to continue to weigh on the year-on-year (YoY) WPI-food inflation print in January 2025.”
ICRA, meanwhile, expects the headline WPI inflation to rise further to around 3 per cent in January 2025. “We expect the WPI inflation to average at an eight-quarter high of ~3.0-3.3 per cent in Q4 FY2025 vs. 2.3 per cent in Q3 FY2025, with the cooling in WPI-food inflation only partly offsetting the uptick in the inflation in the non-food segments in the quarter. At the current juncture, we expect the WPI to average at ~2.5 per cent in FY2025 and ~3.0-3.3 per cent in FY2026.”
Source: The Financial Express
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