Wholesale price inflation (WPI) drops to three-month low as food prices decline

NEW DELHI: The wholesale price-based inflation (WPI) fell to a three-month low of 1.89 per cent in November, driven by reduced food prices. The WPI inflation was 2.36 per cent in October 2024 and 0.39 per cent in November.

Meanwhile, financial experts expect a 0.25 per cent interest rate cut by the RBI during the February policy review. .

Data indicates food inflation decreased to 8.63 per cent in November from 13.54 per cent in October while vegetable inflation declined to 28.57 per cent from 63.04 per cent in October.

However, potato inflation remained higher at 82.79 per cent, while onion inflation significantly reduced to 2.85 per cent in November.

Additionally, the fuel and power sector reported a deflation of 5.83 per cent in November, compared to 5.79 per cent in October. Manufactured items showed 2 per cent inflation in November, up from 1.50 per cent in October.

Barclays' analysis linked the declined in wholesale price inflation in November to lower primary food inflation, despite increased manufactured products inflation.

"December to date, global prices are up 0.7 per cent and are likely to push December WPI inflation higher," Barclays said.

Earlier, consumer price index data showed retail inflation at 5.5 per cent in November, down from 6.2 per cent in October.

Barclays said that this falls within the monetary policy committee's tolerance range of 2-6 per cent, indicating CPI inflation will move towards the 4 per cent target by March 2025.

"We expect the MPC to cut the policy repo rate by 25bps in its February meeting. We are mindful of the almost new-looking MPC that will be in charge of this decision," Barclays said.