Wholesale price-based inflation eased in October to 8.39 per cent year-on-year, compared to 10.70 per cent in September, helped by a fall in commodity prices. Declining for the fifth consecutive month, that Wholesale Price Index (WPI) reading is the lowest since March 2021 and below a double-digit rise for the first time in 18 months.
WPI inflation has been in double digits since April 2021, with the September reading coming in at 10.70 per cent and 13.83 per cent in October 2021. This year the WPI touched a record high of 15.88 per cent in May.
What Has Been Said:
“Decline in inflation rate in October 2022 is primarily contributed by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment; textiles; other non-metallic mineral products; minerals etc.,” the commerce and industry ministry said.
Food Inflation: The Biggest Problem:
Compared to September, when food inflation rose by 11.03 per cent, it was 8.33 per cent in October. Similarly, vegetable inflation last month was 17.61 per cent, less than half of the 39.66 per cent rise in September.
Wholesale inflation in October was 4.42 per cent for manufactured goods and 23.17 per cent for the “Fuel and Power” basket.
What is WPI:
- The wholesale price index is an index that measures and tracks the changes in the price of goods in the stages before the retail level.
- WPI is used as a measure of inflation in some economies.
- WPI includes three components viz,
- Manufactured products – 64.2%
- Primary articles – 22.6%
- Fuel and power – 13.1%
- Instead of the earlier 2004-05, base year for the WPI will be 2011-12.
- In India, this is the most widely used method for calculating the inflation rate. The Wholesale Price Index is the index used to calculate wholesale inflation (WPI).
- This rate of inflation is commonly referred to as headline inflation. The Office of Economic Advisor, Ministry of Commerce and Industry publishes the WPI.