WPI inflation dips to 3.39% in October
New Delhi: In the second consecutive month of decline, wholesale inflation eased to 3.39% in October as food articles, led by vegetables, witnessed softening of prices.
The wholesale price-based inflation, reflecting the annual rate of price rise, in September stood at 3.57%. In October 2015, WPI inflation was (-)3.70%. Wholesale price index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (-)9.97% in October. Inflation in this category had scaled a high of 28.45% in July. This was aided by inflation data for onion, which was at (-)65.97%. Pulses inflation continued to rule high at 21.80% in October, according to the commerce ministry data.
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Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58%. Inflation in fruits rose 6.45% during the month. Overall, the food inflation basket showed moderation with inflation at 4.34% in October, as against 5.75% in September. The inflation print for manufactured articles read at 2.67% in October compared to 2.48% in the previous month. The rate of inflation in sugar was at 29.63% and that for petrol was 3.57%.
The WPI inflation for August has been revised upward at 3.85% against provisional estimate of 3.74%. Data for October retail inflation is expected later in the day. The all-powerful monetary policy committee headed by RBI governor Urjit Patel last month cut benchmark interest rates by 0.25% to 6.25%. While he had signalled more tolerance towards inflation, the easing in CPI data was in line with the RBI’s forecast for average 5% inflation in fourth quarter of 2016. This, many expect, would create more room for interest rate cuts.