Wholesale price inflation touched -0.73 per cent in December–retreating from -1.99 per cent recorded in the previous month but still remaining in the negative zone for 14 months in a row–mainly on a rise in food prices, showed the official data released on Thursday.
The narrowing of deflation suggests producers’ pricing power has improved a tad, although it still remains dented due to the crash in global commodity prices. According to the data released earlier this week, retail inflation also rose to 5.61 per cent in December, its highest since September 2014, marking a fifth straight month of rise.
Food inflation in the wholesale price index (WPI) inched up for a fourth straight month to touch 8.17 per cent in December, compared with 5.20 per cent in November. This is because inflation in pulses continues to remain high (55.64 per cent) and that in vegetable surged to 20.56 per cent in December from 14.08 per cent in the previous month. Retail food inflation also rose to 6.40 per cent in December from 6.07 per cent in the previous month.
Fuel and power inflation hit -9.15 per cent in December, against -11.09 per cent in the previous month, reflecting subdued global crude oil prices.
Inflation in manufactured items stood at -1.36 per cent in December, compared with -1.42 per cent in November.
Although the impact of favourable bases for both the wholesale and consumer price inflation gauges has started to diminish from September, analysts don’t see any sharp upward spiral in price pressure in the coming months. This is because global commodity prices continue to remain subdued.