Wholesale Inflation Bounces Back: Climbs to 0.26% in November after Seven Months of Deflation

After seven consecutive months of deflation, India’s wholesale prices rebounded, recording a growth of 0.26% in November, compared to the -0.52% rate observed in October. The Commerce and Industry Ministry attributes this upturn primarily to increased prices in various sectors, including food articles, minerals, machinery & equipment, computer, electronics & optical products, motor vehicles, other transport equipment, and other manufactured goods.

Key Highlights

1. Food Prices Surge: Wholesale food prices experienced a notable surge, rising by 4.7% in November compared to a mere 1.07% in the previous month. On a month-on-month basis, food prices were up by 2%.

2. Primary Articles and Fuel: Prices of primary articles witnessed a significant rise of 4.8% in November, up from 1.8% in October. In contrast, fuel and power prices were 4.6% lower than the same period last year.

3. Manufactured Products in Deflation: Despite the overall positive trend, prices of manufactured products continued to experience deflation, albeit at the slightest rate in at least three months. They declined by 0.64% compared to November 2022 levels but showed a slight increase of 0.07% compared to October.

Detailed Analysis

• Food Articles: Within primary articles, food articles saw a sharp increase of 8.2%, with notable spikes in paddy and vegetables (10.44%), pulses (21.64%), onions (101.24%), milk (8%), and fruits (8.4%). Cereals inflation stood at 7.12%, a decrease from almost 13% a year ago, while wheat prices rose by 2.55% compared to 18.1% last November.

• Mixed Trends in Food Items: While potatoes offered relief with a significant dip of 27.2% from last November, eggs, meat, and fish prices showed a milder increase of 1.44% in November.

Revision in WPI

The Commerce and Industry Ministry also revised the Wholesale Price Index (WPI) for September, adjusting the inflation rate for the month to -0.07% from the earlier estimate of -0.26%.

Important Questions Related to Exams

Q: What led to India’s wholesale inflation rebound in November?

A: The rebound to 0.26% was primarily driven by increased prices in food articles, minerals, machinery, and other sectors after seven months of deflation.

Q: How did food prices contribute to the upturn?

A: Wholesale food prices surged by 4.7% in November, with significant increases in various categories, including pulses, onions, and fruits.

Q: Were there any sectors still experiencing deflation?

A: Yes, manufactured products continued to deflate slightly, declining by 0.64% from November 2022 levels.