WPI inflation eases to 12.96% in Jan from 13.56% in the previous month

Wholesale price index (WPI)-based inflation rate decelerated to 12.96% in January from 13.56% in the preceding month as per the data released by the industry department.

India’s wholesale price inflation rate eased in January but remained in double digits for the 10th consecutive month amid rising crude oil prices.

Data released by the industry department showed wholesale price index (WPI)-based inflation rate decelerated to 12.96 per cent in January from 13.56 per cent in the preceding month. During January, while inflation for manufactured items eased to 9.42 per cent, food inflation rate accelerated to double digits at 10.33 per cent mostly due to an unfavourable base. Fuel inflation rate marginally eased to 32.27 per cent in January from 32.3 per cent in December.

The decline in inflation rate for manufactured products was led by products including food, beverages, tobacco, textiles, wood, paper, chemicals, rubber, cement, basic metals, steel among others.

Aditi Nayar, chief economist at ICRA Ltd, said the WPI inflation rate receded in January led by a decline in core items, manufactured food products, and crude petroleum and natural gas. “Discomfortingly, primary food and non-food articles, and minerals, recorded a pickup in the inflation in January 2022 relative to December 2021,” she said.  

Nayar said the initial index for crude oil for January 2022 is sure to undergo a lagged upward revision, which will push up the revised WPI inflation for that month above to initial 13%. “The continuous hardening in crude oil prices exacerbated by the ongoing geo-political concerns, and its impact on the rupee, poses the biggest risk to the WPI inflation trajectory in the ongoing quarter,” she added.