Business

Wholesale inflation rises over 13% in December on rising costs: 10 points

January 14, 2022
Sezarr

WPI inflation stood at 13.56 per cent in December 2021, today’s government data shows

Inflation based on the monthly Wholesale Price Index (WPI) stood at 13.56 per cent for December 2021, up from 1.9 per cent in the same month of 2020, as shown on Friday, January 14. Simultaneously, retail inflation also rose to 5.59 per cent in December, tracking a sharp rise in food prices. The next WPI inflation data will be released after the Budget for 2022 – to be presented on February 1.

Wholesale inflation in December 2021: All you need to know

  1. The country’s annual wholesale price-based inflation eased marginally to 13.56 per cent in December but remained in double digits for the ninth consecutive month due to rising input costs for firms, higher prices of mineral oils, basic metals and crude petroleum and natural gas. reflects. gas.

  2. WPI inflation in December 2021 was marginally lower than 14.23 per cent recorded in the previous month (November 2021) – the highest in more than a decade, government data showed on Friday.

  3. The wholesale inflation data – or the rate of increase in wholesale prices, comes at a time when rising COVID-19 cases – including the Omicron variant, have posed a challenge to the country’s economic growth.

  4. Inflation in food articles also rose to 9.56 per cent on a month-on-month basis in December from 4.88 per cent in November. The price growth rate of vegetables increased to 31.56 per cent, from 3.91 per cent in the previous month.

  5. Rising costs for products such as fuels, metals and chemicals have driven up wholesale prices in recent months, a proxy for producers’ prices.

  6. Wholesale fuel and electricity prices rose 32.30 per cent in December from 39.81 per cent in November, while manufactured product prices rose 10.62 per cent as compared to 11.92 per cent in the previous month.

  7. Retail inflation also hit a five-month high of 5.59 per cent in December, tracking a sharp rise in food prices. Headline retail inflation is hovering around five per cent, which is still well within the Reserve Bank of India’s average target of two per cent-six per cent.

  8. The central bank left the benchmark repo rate unchanged at four per cent for the ninth consecutive meeting last month as economic growth remains a challenge amid rising COVID-19 cases.

  9. The RBI – which primarily factors in retail inflation while arriving at its bi-monthly monetary policy – expects the inflation print to be somewhat higher for the rest of the year as the base effect turns unfavourable.

  10. Analysts fear that rising Omicron cases, easing RBI liquidity and rising global crude oil prices could push domestic prices even higher in the next few months, before easing in the second half of the year.

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