Dec WPI eases to 5-month low of 6.16%

Food prices rose 13.68% last month, much slower than an annual rise of 19.93% in November

The wholesale inflation declined to a five-month low in December on lower vegetable prices.

WPI-based inflation stood at 6.16% from 7.52% a month ago, data released by Ministry of Commerce and Industry showed today. This is the first time since May that headline inflation has declined from the previous month. In November, the WPI inflation was at a 14-month high.

Food prices rose 13.68% year-on-year last month, much slower than an annual rise of 19.93% in November. The inflation for onions, which was the prime cause for a surge in vegetable prices, went down to 39.56% in December from 190.34% a month ago. However, inflation for potato went up from 26.71% in November to 54.65% in December.

The index for October was revised upwards to 7.24% from the earlier reading of 7% recorded by the ministry.

The inflation for manufactured products remained at 2.64%, same as in the previous month.

The rate of price rise for fuel and power items stood at 10.98% in December from 11.08% in the previous month.

The Consumer Price Index (CPI)–based inflation for December had also fallen to a three-month low of 9.87% in December due to a decline in vegetable prices, official data had shown on Monday.

Experts had then said that if WPI inflation also eases, the RBI may not go for a rate hike in their monetary policy review due on 29 January. The RBI had maintained status quo on the repo rate at 7.75% in its mid-quarter monetary policy review, as the central bank had expected a softening in vegetable prices.