Driven by increase in fuel and manufacturing, the inflation rate in October 2018, based on monthly Wholesale Price Index (WPI), rose to a four-month high of 5.28 per cent (year-on-year) compared to 3.68 per cent in the same month last year and 5.13 per cent last month.
Food prices, including prices of vegetables declined but price of potatoes showed a sharp increase, as per provisional figures released by the Commerce & Industry Ministry on Wednesday.
Inflation in 'fuel and power' increased to 18.44 per cent in October 2018 from 16.65 per cent in September. In petrol and diesel, inflation was 19.85 per cent and 23.91 per cent respectively. For liquified petroleum gas (LPG) the increase was 31.39 per cent during the month.
The WPI measures the average change in prices received on bulk sale of goods.
“The higher inflation number driven by fuel and manufacturing can be ascribed to higher crude oil prices as well as regaining of pricing power by corporates in manufacturing. This also comes from the corporate results for Q2. Going ahead however, some moderation may be expected,” according to an analysis by CARE Ratings.
However, it cautioned that the MSP impact (rise in MSP) has not yet been witnessed and as November is peak harvest time it could kick in with some government intervention. “Also prices of potato have gone up and can spike the food inflation number in the coming months,” CARE Ratings said.
Unlike the WPI inflation, the consumer price index (CPI) inflation data, which reflects prices at the retail level, cooled down to a year-low of 3.31 per cent.