WPI inflation rises to 4-month high of 2.36% in Oct, food prices spike

Wholesale price inflation rose to a 4-month high of 2.36 per cent in October, as prices of food items, especially vegetables, and manufactured goods spiked and became more dearer.

October is the second consecutive month for the rise in the WPI inflation print. WPI higher than October's level was recorded last in June 2024, when it was 3.43 per cent. In October last year, the WPI inflation was was (-) 0.26 per cent. 

According to government data released on Thursday (November 14), the wholesale price index (WPI) based inflation was 1.84 per cent in September 2024. 

Inflation in food items, manufactured

As per the data, inflation in food items shot up to 13.54 per cent in October, as against 11.53 per cent in September. This was led by 63.04 per cent inflation in vegetables, as against 48.73 per cent in September.

Inflation in potato and onion remained high at 78.73 per cent and 39.25 per cent, respectively, in October.

Fuel and power category witnessed deflation of 5.79 per cent in October, against a deflation of 4.05 per cent in September. In manufactured items, inflation was 1.50 per cent in October, as against 1 per cent in the previous month.

Why inflation?

On Thursday, the Ministry of Commerce & Industry issued a statement in which it said,"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 consumer price index data released earlier this week showed retail inflation surged to a 14-month high of 6.21 per cent with a sharp rise in prices of food items.

The level is higher than the upper tolerance limit of the Reserve bank of India (RBI), which may make cutting the benchmark interest rates difficult in the policy review meeting in December.

The RBI, which mainly takes into account retail inflation while framing monetary policy, kept benchmark interest rate or repo rate unchanged at 6.5 per cent in its monetary policy review last month.

(With inputs from agencies)