WPI inflation rises to 5.28% in October on costlier fuel

Inflation-based on wholesale prices rose to a four-month high of 5.28% in October, mainly due to spike in petrol and diesel prices, even as food prices softened.

The Wholesale Price Index (WPI)-based inflation stood at 5.13% in September and 3.68% in October last year.

According to the government data released on Wednesday, food articles witnessed softening of prices with deflation at 1.49% in October, against 0.21% in September.

Vegetables too became cheaper with deflation at 18.65% in October, compared to 3.83% in the previous month.

Inflation in ‘fuel and power’ basket in October spiked to 18.44%, from 16.65% in September. Individually, in petrol and diesel it was 19.85% and 23.91%, respectively, and for liquified petroleum gas (LPG) it was 31.39% during October.

Among food articles, potato prices continued to rule high with 93.65% inflation in October. While onion witnessed deflation of 31.69%; the same for pulses stood at 13.92%.

The 5.28% inflation is the highest in four months, and a higher inflation than this level was last seen in June at 5.68%.

The WPI inflation is in contrast to the retail or consumer price index-based inflation data released earlier this week. The October CPI inflation had cooled to a year-low of 3.31%.

The Reserve Bank of India (RBI) mainly takes into account retail inflation data while formulating monetary policy.

In its fourth monetary policy review for the fiscal, released last month, the Reserve Bank maintained status quo on the benchmark interest rate but warned that volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation.

For October-March, the RBI pegged CPI-based retail inflation to be between 3.9-4.5%.

Source: Read Full Article