Wholesale inflation rises to 2.37% in Dec; eyes on RBI’s rate decision

Wholesale price inflation rose to 2.37% in December, due to spike in prices of non-food articles, manufactured items as well as fuel and power, even though food items saw marginal easing, government data released on Tuesday showed.

The Wholesale Price Index (WPI) based inflation was 1.89% in November. It was 0.86% in December. In October it was 2.75%.

As per the data, inflation in food items eased marginally to 8.47% in December, as against 8.63% in November. Cereals, pulses and wheat saw easing in inflation in December.

However, inflation in vegetables continued to remain high at 28.65%, potato at 93.20% and onion at 16.81% in December.

Non-food articles such as oil seeds, saw spike in inflation in at 2.46 per cent.

The fuel and power category witnessed a deflation of 3.79 % in December. In manufactured items, inflation was 2.14%, against 2 per cent in November.

ICRA Senior Economist Rahul Agrawal said the uptick in WPI was led by the fuel and power and primary non-food articles, which together accounted for as much as 42 basis points of the 48 basis points increase in the headline print between these months.

The RBI's monetary policy committee will announce its interest rate decision on February 7. It is widely expected that the RBI, which eased liquidity in its last meeting in December, will cut interest rates.