India’s wholesale price index (WPI)-based inflation for the month of October escalated to a four-month high of 2.36 per cent on an annual basis in comparison to 1.84 per cent in September, showed the provisional data released by the Ministry of Commerce & Industry on Thursday. In August, WPI inflation was at 1.31 per cent and July inflation was at 2.04 per cent. “Inflation in October, 2024 is primarily due to increase in prices of food articles, manufacture of food products, other manufacturing, manufacture of machinery & equipment, manufacture of motor vehicles, trailers & semi-trailers, etc.,” the release said.
The month over month change in WPI for the month of October, 2024 stood at 0.97 per cent as compared to September, 2024.
Per the release by the Ministry of Commerce & Industry, inflation for food articles went up to 13.54 per cent in October as compared to 11.53 per cent in September. The inflation rate for primary articles went up to 8.09 per cent in October from 6.59 per cent in September. The fuel and power inflation was at -5.79 in October as against -4.05 per cent in September. And manufactured products inflation came in at 1.50 per cent during the month under review.
Under the food articles category, vegetable inflation was recorded at 63.04 per cent in October, recording a significant uptick from 48.73 per cent in September. Pulses inflation during the month of October was at 9.74 per cent, while the inflation for wheat stood at 8.04 per cent during the same month in comparison to 7.60 per cent in September. Cereals inflation was at 7.91 per cent. Eggs, Meat & Fish inflation came in at -0.52 per cent. Potato and onion reported inflation at 78.73 per cent and 39.25 per cent respectively.
The non-food articles reported WPI inflation at -1.71 per cent in October as against -1.64 per cent during the previous month. Minerals inflation came in at 1.87 per cent in October, down from 3.03 per cent in September. The Crude Petroleum & Natural gas posted wholesale inflation at -12.16 per cent in October and crude petroleum was at -12.98 per cent.
Reacting on the same, Suman Chowdhury, Executive Director & Chief Economist, Acuité Ratings & Research, said, “India’s wholesale inflation continued to inch up gradually for the third consecutive month to 2.36 per cent in October, from 1.84 per cent in September. Expectedly, the Food Index is leading the charge with 11.59 per cent YoY growth, a figure consistent with the annualized growth in retail food inflation. This is despite a continuing contraction in fuel inflation (-5.79 per cent YoY) which mitigates the risks of a rise in logistics and power costs. Lower commodity prices also continue to support a relatively benign wholesale inflation environment.”
“Given the arrival of the kharif crop and a favourable outlook on rabi sowing, food inflation is likely to trend its way down and along with soft commodity prices, should keep the WPI inflation print within 3.0 per cent in the current fiscal. However, we have revised our forecast for headline retail inflation to 4.8 per cent, given the stickiness in food inflation observed in Oct-Nov ’24. This not only is likely to lead to a postponement of a rate cut by RBI in Dec’24, but also creates uncertainty on the decision in Feb’25,” he added.