India’s wholesale inflation moderated to 1.9% in November, down from 2.4% in October, with food price inflation easing significantly from a 25-month high of 11.6% in October to 8.9%. Despite this, prices for manufactured products, such as food products, furniture, pharmaceuticals, and electrical equipment, continued to rise, contributing to higher inflation in this category. Retail inflation also saw a slowdown, but food prices, particularly for certain items like edible oils and potatoes, remained high.
Key Drivers of Inflation in November
Food Price Inflation
- Food inflation decelerated to 8.9% from 11.6% in October, with notable drops in vegetable prices (from 63% to 28.6%), although potato prices rose sharply by 82.8%.
- Edible oils and fats saw a steep rise of 28%, up from 20.2% in October.
- Inflation in pulses, fruits, wheat, and paddy persisted, but at a slower pace.
Manufactured Products Inflation
- Prices for manufactured goods saw an uptick, notably in food products, pharmaceuticals, and textiles, rising 2% in November, driven by elevated input costs.
Fuel and Power
- Fuel and power prices remained in deflationary territory, with a 5.83% decline year-on-year.
Core Inflation
- Core inflation, excluding food and energy, remained subdued despite higher prices in manufactured goods.
Sequential Changes
- On a month-on-month basis, the Wholesale Price Index (WPI) fell by 0.06%, driven by declines in primary articles and food items.
- Fuel prices rose by 1.2%, breaking a two-month streak of declines, while manufactured products saw a slight increase of 0.4%.
Outlook
Experts expect further moderation in inflation, with the possibility of rate cuts by the Reserve Bank of India, even as food price inflation, especially for specific items, remains a challenge.
Summary of the news
| Why in News | Key Points |
|---|---|
| Wholesale inflation eases in November | – India’s wholesale inflation dropped to 1.9% in November from 2.4% in October. – Food inflation slowed to 8.9% from 11.6%. – Vegetable inflation dropped from 63% to 28.6%. – Potato inflation surged to 82.8%. – Manufactured products inflation rose by 2%. |
| Primary articles and fuel prices | – Primary articles inflation eased to 5.5% from 8.1% in October. – Fuel and power prices continued in deflation, falling by 5.83%. |
| Food inflation specifics | – Edible oils and fats inflation surged to 28% from 20.2%. – Inflation in pulses, wheat, and paddy remained elevated at 6-8%. |
| Manufactured goods and fuel impact | – Manufactured goods saw a 2% rise due to higher input costs. – Fuel prices increased by 1.2%, ending a two-month deflationary trend. |
| Core inflation | – Core inflation, excluding food and energy, remained subdued. |
| Current WPI index | – The Wholesale Price Index (WPI) saw a month-on-month decrease of 0.06%. |
| Fiscal Year Trends | – Wholesale inflation for FY 2024-25 averaged 2.1% till November, up from a contraction of 1.3% in the same period last year. |
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