India Witnesses Wholesale Price Growth in November After 7-Month Decline

In a recent development, India's November wholesale price index (WPI) saw a shift, posting a 0.26% increase from the same month in the previous year. This marks the first rise after seven consecutive months of declining figures, largely propelled by a surge in food prices.

Rising Food Costs Drive WPI Upward

The November upturn in the wholesale price index outstripped the anticipations of economic experts, who had projected a modest 0.08% growth. Instead, the index lifted from a 0.52% dip observed in October. The data reveals that food prices experienced a significant yearly increase of 4.69% in November, a pronounced jump from October's 1.07% rise. In contrast, the prices for manufactured products declined by 0.64%, showing a slightly smaller drop than the 1.13% seen the month before.

Fuel Prices Continue to Drop

Despite the upturn in food prices, the fuel and power segment continued to experience a price decline, falling by 4.61% year-on-year. This was a steeper drop than the 2.47% recorded in October. Additionally, prices of primary articles went up by 4.76%, accelerating from a 1.82% increase in the previous month.

Retail Inflation Also on the Rise

Mirroring the wholesale trend, India’s retail inflation rate quickened in November, reaching its highest in three months. The ascent was once again fueled by a rise in food prices, forging a scenario where the Reserve Bank of India (RBI) is unlikely to lower interest rates in the near future.

Concurrently, RBI Governor Shaktikanta Das has highlighted that the near-term inflationary outlook harbors risks, especially concerning food inflation, which could possibly cause uplifts in prices during November and December. Despite these risks, Mr. Das pointed out that core inflation, which excludes food and fuel prices known for their volatility, is on a general downtrend.

Inflation, Economy, Wholesale