According to data provided by the commerce ministry on Thursday, increases in the cost of essential foods and an unfavorable base caused India’s wholesale pricing index (WPI)–based inflation to reach a four-month high of 2.36% in October.
WPI inflation in September 2023 was 1.84%, whereas in October 2023 it was (-)0.26%. October saw the biggest wholesale food inflation reading in 28 months, rising to double digits at 11.59%. The price increases for cereals, oilseeds, and vegetables were the primary causes of this.
According to Aditi Nayar, chief economist at Icra, food inflation alone raised the headline WPI figure by up to 63 basis points between September and October 2024.
While the inflation rate for “fuel & power” fell to a 14-month low of (-)5.79%, the inflation rate for “manufactured products” rose to 1.5% in October, the highest level in three months.
The increase in the wholesale prices of manufactured food, textiles, basic metals, and machinery caused the prices of manufactured goods to increase sequentially for the second consecutive month. According to economists, this could lead to a greater pass-through of pricing to retail prices, which would raise core CPI inflation even more.
Core CPI inflation reached a 10-month high of 3.7% in October, according to data released on Tuesday, and it is only anticipated to continue rising. Economists predict that by January or February, core inflation may reach 4%.
In October, just four of the twenty-one categories of manufactured (non-food) products had negative YoY print, whereas seventeen categories had positive print. Other manufacturing (+15.6% YoY), drinks (+2.0% YoY), and wearing clothing (+1.9% YoY) had the highest rates of inflation. In contrast, the categories with the lowest inflation were metal goods (-2.2% YoY), basic metals (-3.1% YoY), and other non-metallic mineral products (-3.4% YoY).
