Image for representational purpose only. , Photo credit: The Hindu
India’s wholesale price inflation eases further to 4.73% in January December’s 22-month low of 4.95%The pace of inflation in food and primary articles hardened sequentially, even as fuel and power inflation moderated in prices of manufactured products.
Wholesale prices were reported to have risen by 13.7% in January 2022, so base effects offset this softening in no small measure. January marked the eighth month of sequential moderation in wholesale inflation, as it peaked at 16.63% in May 2022.
“Within manufacturing, cement has registered a high growth of around 8.4% which will increase the construction cost and may impact the real estate sector. Lower fuel prices may bring down these costs,” said Madan Sabnavis, chief economist at Bank of Baroda, who expects wholesale inflation to ease to around 4% by March.
The commerce and industry ministry has also revised the wholesale inflation rate Nov 2022 from earlier estimate of 5.85% Based on updated responses to 6.12%, fuel and power inflation rose to 19.7% from 17.3% for that month.
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It is the second month in a row that retail inflation, which rose to 6.52% from 5.7% in December, is higher than the wholesale inflation rate, indicating that input cost pressures are easing for producers, even as they continue to shoulder the burden. Let’s continue consumers.
Food inflation, which had eased sharply from 2.5% in November to 0.65% in December, rebounded to around 3%. Inflation in primary articles also rose to 3.9% from 2.4% in January.
Inflation in fuel and power eased from 18.1% in December to 15.2% in January, while inflation in manufactured products moderated marginally to 3% from 3.4% in the same time frame.
“The decline in rate of inflation in January, 2023 is mainly contributed by mineral oils, chemicals and chemical products, textiles, crude petroleum and natural gas, textiles and food products,” the ministry said.
Within food items, vegetable prices fell year-on-year for the third consecutive month, with the deflation rate falling from -36% in December 2022 to -26.5%. Consecutive month, a decrease of 25.2% in January.
Inflation in potatoes fell to an at least six-month low of 9.8%, but most other food items rose to multi-month highs. Inflation in cereals reached 15.5% in January, inflation in paddy rose by 7.2% and wheat by 23.6% (up from 20.7% in December 2022).
Milk inflation rose to 9% from 7% in December, inflation in pulses rose to a five-month high of 2.4% and fruits to a four-month high of 4.1% in January.