Header Ad

India WPI Inflation Rises to 2.36% in October, Food Prices spike

By Akanksha - November 14, 2024 11:51 PM

India’s wholesale price index (WPI)-based inflation surged to a four-month high of 2.36% in October 2024, marking a notable increase from September’s 1.84%. This rise comes after consistent inflation rates in August at 1.31% and July at 2.04%. The Ministry of Commerce & Industry’s report highlights that this spike is primarily driven by the cost of food articles, manufacturing of food products, machinery and equipment, motor vehicles, and other manufacturing sectors.

Factors Contributing to October's Inflation Spike

The October inflation increase is attributed to various elements:

  • Food Articles: Inflation for food articles rose sharply to 13.54% from 11.53% in September, indicating a growing strain on essential commodities.
  • Primary Articles: Saw a jump to 8.09% from 6.59% in September.
  • Manufactured Products: Inflation within this category reached 1.50%.
  • Fuel and Power: Remained negative at -5.79%, a slight drop from -4.05% in the previous month, aiding in mitigating overall inflation pressure.

Key Insights on Food Inflation

Food inflation remains the primary driver, with specific subcategories showing significant rises:

  • Vegetables: A steep inflation of 63.04% in October, up from 48.73% in September, showcased intense price pressure on household staples.
  • Potatoes and Onions: Potatoes reported an inflation rate of 78.73%, while onions saw a 39.25% rise, stressing the impact on common cooking essentials.
  • Cereals and Pulses: Inflation rates for cereals and pulses stood at 7.91% and 9.74%, respectively.
  • Wheat: Marked an increase at 8.04%, slightly higher than September’s 7.60%.

Non-Food and Other Categories

  • Non-Food Articles: Registered a slight dip in inflation at -1.71% compared to -1.64% in September.
  • Minerals: Inflation decreased to 1.87% from 3.03% in September.
  • Crude Petroleum & Natural Gas: Continued its deflationary trend with inflation at -12.16%, with crude petroleum alone at -12.98%.

Economic Perspectives

Suman Chowdhury, Executive Director & Chief Economist at Acuité Ratings & Research, commented on the persistent rise in wholesale inflation: 'India’s wholesale inflation has shown a consistent increase over the past three months, with October reaching 2.36%. The Food Index, leading this surge, saw an 11.59% year-on-year growth, aligning with retail food inflation patterns. The decline in fuel inflation (-5.79%) has somewhat cushioned the inflationary impact, aiding in managing logistics and power costs.'

Chowdhury further noted the potential impact on monetary policy, highlighting that despite lower commodity prices helping to moderate overall inflation, the firm food inflation figures could delay the Reserve Bank of India’s anticipated rate cut in December 2024 and potentially into early 2025.

Future Outlook

Analysts anticipate that the arrival of the kharif harvest and a positive rabi sowing season might temper food inflation in the coming months. Combined with current low commodity prices, this could help keep the WPI inflation below 3.0% for the fiscal year. However, caution is advised as persistent food price pressures have led to a revision in retail inflation forecasts, now expected at 4.8% for the current fiscal period.

The situation underscores the complexity of balancing inflation control with economic growth, presenting challenges for policymakers and market analysts alike.

Also Read: Pakistan Blast Video: 24 killed and 40 injured in suicide blast at Quetta railway station

About the Author:

Akanksha Sinha Writter

Akanksha Sinha

I'm Akanksha Sinha, an expert in writing sports blogs, news, and various articles for entertainment and more. I bring a unique flair to my work, providing insightful perspectives on the world of sports.

My articles aim to inform and entertain, making me a go-to source for sports enthusiasts seeking a blend of information and enjoyment. With a passion for storytelling and a keen eye for detail, I consistently deliver compelling narratives that resonate with a diverse audience.