~ Trinanjan Chakraborty
The wholesale price (WPI) based inflation in the country rose to an eight-month high of 1.48% in October, data released by the Ministry of Industry & Commerce yesterday showed. The WPI inflation stood at 1.32% in Sep’20 and was 0.0% in Oct’19. The last time the WPI inflation was higher than in the preceding month was in February of this year when it had hit 2.26%. Last week, as per data released by Ministry of Statistics & Programme Implementation (MOSPI), the retail inflation in Oct’20 based on consumer price index (CPI) had touched 7.61% – highest since May 2014 – well beyond the RBI mandated range of 2-6%. The retail inflation stood at 7.27% in Sep’20.
Breaking down the WPI based inflation, the increase was led mainly by manufactured products category – going up from 1.61% in September to 2.12% in October. Inflation in primary articles slowed to 4.74% in Oct’20 (from 5.10% in previous month) while the same for Power & Fuel was at -10.95% (from -9.54% in previous month). The food inflation based on WPI index slowed to 5.78% from 6.92% in Sep’20. The WPI based inflation on food articles dropped to 6.37% from 8.17% in Oct. However, inflation in potatoes stood very high – at 107.70%, almost unchanged from September’s level (107.63%). WPI based inflation in vegetables softened considerably – from 36.54% to 25.23% – but still remained high. The WPI based inflation rate for manufactured food items went up marginally to 4.53% from 4.40% in Oct’20.
The consumer price index (CPI) based food inflation in October stood at 11.07%, up from September’s 10.68%. The retail (CPI based) inflation in Oct’20 stood at 22.51% for vegetables, 18.34% for pulses & products, 15.17% for oils & fats and 11.28% for spices.
Last week, in a bulletin on state of the economy, the RBI had flagged off the unrelenting pressure of inflation as a key concern that could destabilize the post-Covid economic recovery.