December WPI Inflation eases to 3-month low at 3.58% on lower vegetable prices

December WPI Inflation eases to 3-month low at 3.58% on lower vegetable prices

India News

The Wholesale Price Index (WPI) for the month of December was recorded 3.58% as compared to 3.93% in the previous month on the back of lower vegetable prices. While ET Now poll predicted it to be higher than previous month at 4.01%, the WPI surprised at 3.58%, even lower than the previous month. The rise in November was due to unexpected heavy rains which damaged perishable agricultural products. However, December WPI core inflation was recorded at 3.1% as compared to 3% in the previous month.The December WPI food inflation was recorded 2.91% as compared to 4.1% in November. The WPI primary article inflation was at 3.86% as compared to 5.28% in the previous month. The major fall was in vegetable prices, which eased 22.3% month-on-month basis, even as manufactured products inflation inched up marginally 0.1% m-o-m.Kitchen staple onion witnessed a whopping 197.05 per cent price rise in December. Inflation in protein rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent. In the fuel and power segment, wholesale inflation rose to 9.16 per cent in December, while it was 2.61 per cent for manufactured items.Data released last week showed that retail inflation breached the RBI’s comfort level to touch 5.21 per cent in December on rise in prices of food items, especially vegetables.The Reserve Bank takes into account retail inflation while deciding on key policy rates. In its last policy review in December, the RBI had kept key interest rate unchanged. It raised inflation forecast for remainder of the current financial year to 4.3-4.7 per cent, on account of global crude oil prices and implementation of the 7th Pay Commission recommendations. Meanwhile, inflation for October has been revised upwards to 3.68 per cent from the provisional estimate of 3.59 per cent released earlier.