Wholesale price index (WPI) based inflation rose to a four-month high of 2.36 per cent in October 2024 on the back of an increase in prices of food items, especially vegetables, and manufactured food products, official data released on Thursday showed.
In September 2024, WPI inflation had come in at 1.84 per cent on a year-on-year basis. In October last year, WPI inflation had contracted 0.26 per cent.
For the month under review, food articles inflation surged 13.54 per cent as against 3.17 per cent in October 2023. It was 11.53 per cent in September 2024.
The rise in food articles inflation was led by vegetables, which shot up by 63.04 per cent in October 2024, as against a contraction of 29.27 per cent in October 2023. Inflation in potatoes and onions remained high at 78.73 per cent and 39.25 per cent, respectively, in October.
“Inflation in October 2024 is primarily due to an increase in prices of food articles, manufacture of food products, other manufacturing, manufacture of motor vehicles, trailers and semi-trailers, etc,” the Ministry of Commerce and Industry said.
Meanwhile, the food index surged 11.59 per cent in October 2024, as against 9.47 per cent in September 2024, official data showed.
The fuel and power category witnessed a deflation of 5.79 per cent in October, against a deflation of 4.05 per cent in September.
Manufactured items inflation was 1.50 per cent in October 2024, as against 1 per cent in the previous month.
The latest WPI reading for October 2024 comes on the heels of consumer price index data released earlier this week where retail inflation hit a 14-month high of 6.21 per cent on the back of a sharp rise in prices of food items.
The level is higher than the upper tolerance limit of the Reserve Bank of India (RBI), which may make cutting the benchmark interest rates difficult in the policy review meeting in December.
The Reserve Bank of India, which mainly takes into account retail inflation while framing monetary policy, has kept the repo rate unchanged at 6.5 per cent since February 2023.
Shreya Sodhani, Regional Economist, Barclays Research, said in a research note that perishable food prices, particularly vegetables, are driving both retail and wholesale prices. Manufactured products WPI rose moderately to 1.5 per cent in October 2024, reflecting the rise in prices of metals in the month, she noted.
Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers, said that WPI inflation surging to 2.36 per cent for the month was driven by the rise in primary products, particularly on account of food articles. The rise was driven by vegetables inflation. Inflation in manufacturing been on rise due to unfavourable base. “We expect the manufacturing inflation continuing uptrend, while the better harvest shall ease supply concerns of food items. Fuel inflation remaining in negative territory has been a positive factor thus containing the spread of inflation across categories,” he added.