economy

WPI inflation surges to record 14.23% in November

WPI inflation surges to record 14.23% in November

NEW DELHI : Annual wholesale price-based inflation surged to a record 14.23% in November fuelled by price rise in items like fuel, oilseeds, minerals, vegetable oils, basic metals, wheat and fruits. Data from the economic adviser in the Department for Promotion of Industry and Internal Trade showed that price increase in products like mineral oils, crude petroleum and natural gas and food products compared to the corresponding month of the previous year contributed to the high rate of inflation. Food inflation surged to 6.7% in November from 3.1% in October. Wholesale price index (WPI) based inflation was at 12.5% in October and at 2.29% in November 2020. The inflation for headline and core-WPI and fuel and power printed at all time high levels in November 2021, said Aditi Nayar, chief economist at rating agency ICRA Ltd. The surge in WPI inflation and the hardening of consumer price index (CPI) based inflation which hardened to 4.91% in November compared to 4.48% in October amid concerns about the durability of the economic recovery seen in the run up to the festive season would be a key consideration for the finance ministry and the Reserve Bank of India in managing the economy. Several nations including the US are currently grappling with high inflation at a time Omicron has introduced fresh fears about economic recovery. WPI inflation has been in double-digits since the start of this fiscal, and the pace has been on the rise since September, rating agency CRISIL Ltd. said in an analysis, quoting chief economist Dharmakirti K Joshi. “Cost pressures are also becoming more broad-based as food inflation has begun rising in addition to already-elevated non-food inflation. The CPI data indicates that producers have been gradually passing through these cost pressures to consumers, said Joshi. In the case of many non-food, non-energy items too, inflation in November turned out to be steeper than what economists have expected. Although the prices of various food items have displayed a seasonal downtrend and those of several commodities have corrected to an extent following the reality check provided by the Omicron variant, the Indian rupee has depreciated in recent sessions, which would curtail the extent of moderation in the WPI inflation in December 2021, said Nayar in an analysis. In manufactured products, vegetable and animal oils and fats, textiles, basic metals, steel and fabricated metal products other than machinery saw sharp rise in inflation. Rising input cost has been an issue that businesses have been battling for some time now. Manufactured products which have a weight of over 64% in WPI, saw an year-on-year inflation of 11.92% in November, while primary articles saw 10.34% inflation and crude oil over 91%. LPG, petrol and diesel, too faced steep price increases compared to the levels seen a year ago. “As some stability in vegetable prices has been observed in the recent weeks, we expect WPI inflation to subside in the coming months, said Pradeep Multani, president of PHD Chamber of Commerce and Industry. Download.

economy 2021-12-14 Livemint