India’s wholesale price inflation rose to 2.37% in December 2024, up from 1.89% in November, driven by higher prices in manufactured products, non-food articles, and fuel and power.
Key Drivers of Inflation
Manufactured Products: Prices increased by 2.14% in December, contributing significantly to the overall inflation rate.
Non-Food Articles: This category saw a 2.46% rise in inflation, up from a deflation of 0.98% in November, indicating increased costs in sectors like oilseeds.
Fuel and Power: The sector experienced a deflation of 3.79% in December, an improvement from the 5.83% deflation in November.
Food Inflation Trends
Overall Food Inflation: Eased slightly to 8.47% in December from 8.63% in November.
Vegetables: Continued high inflation at 28.65%, marginally up from 28.57% in November.
Potatoes: Inflation remained elevated at 93.20%.
Onions: Inflation increased to 16.81% from 14.23% in November.
Retail Inflation Comparison
Retail inflation, as measured by the Consumer Price Index (CPI), decreased to a four-month low of 5.22% in December, down from 5.48% in November, indicating easing consumer price pressures.
Implications for Monetary Policy
The rise in wholesale inflation, coupled with declining retail inflation and a slowdown in economic growth to 6.4% in 2024-25, may prompt the Reserve Bank of India to consider reducing interest rates in its upcoming February meeting.
Summary of the news
| Why in News | Key Points |
|---|---|
| Wholesale price inflation rises to 2.37% in December 2024 | 1. Inflation Rise: 2.37% in December 2024, up from 1.89% in November 2024. 2. Key Drivers: Manufactured goods, non-food articles, fuel, and power. 3. Fuel Sector: 3.79% deflation in December, improvement from 5.83% deflation in November. 4. Food Inflation: Slight decrease to 8.47% from 8.63%. 5. Vegetables: Inflation at 28.65%. 6. Onions: Inflation increased to 16.81%. 7. Retail Inflation: Decreased to 5.22% from 5.48%. 8. Implications for RBI: May influence RBI’s rate decision in February 2025. |
| Static Points | Inflation Measures: Wholesale Price Index (WPI) measures inflation at the wholesale level, impacting producers and suppliers. Consumer Price Index (CPI): Measures retail inflation, affecting consumers. RBI: Reserve Bank of India, which controls monetary policy and influences inflation through interest rate decisions. |
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