WPI inflation in India rose 7.52 per cent during November, 2013 as vegetable and fruit prices increased while protein-rich items like eggs also became dearer.
The whole sale price index stood at 7.52 per cent in November as compared to 7 per cent in October. The rate was 7.24 per cent during the corresponding month of the previous year. The numbers come just after CPI inflation (combined) released last week logged a high 11.24 per cent. Chances are with these high numbers RBI will go in for another rate hike.
For April-November period, the inflation rate was 6.7 per cent as against 4.84 per cent during the corresponding period of the last fiscal. The index for food articles group rose by 2 per cent due to egg prices rising 8 per cent, fruits and vegetables became expensive by 6 per cent while beef and buffalo meat prices rose 5 per cent each.
The index for fuel and power group rose by 0.1 per cent due to higher price of LPG, bitumen, and high speed diesel.
Dr Soumya Kanti Ghosh, Chief Economic Adviser, Economic Research Department, State Bank of India
WPI inflation touched 7.5% in Nov’13, driven by increase in food prices (market expectations at 7%). The Sep’13 inflation numbers were revised upwards to 7.05% from 6.46%.
The WPI inflation trajectory will move down from Dec’13 onwards, but we maintain that the downside may be capped and some CPI-WPI convergence may be visible in coming months. We have now revised our average WPI for FY14 at 6.7%. CPI trajectory should bring in more comfort, with the CPI numbers hitting a sub 9% by Mar’14.
WPI March end numbers may be at 7.2%, with an upward bias. Core WPI has moved up, but what is worrying is the increase in imported inflation for the latest month, implying the impact of pass-through. Interestingly, CPI core and CPI excluding vegetables for Nov’13 are now tracking at almost identical levels, implying the current surge being entirely driven by food prices. Our trend analysis suggests that pace of decline in vegetables prices at wholesale mandi has increased