Wholesale price index drops to 19-month low of 8.39%

New Delhi, November 14

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Retail as well as wholesale inflation dropped in the month of October due to a fall in global prices of commodities. The fall in the annual rate of inflation based on the wholesale price index (WPI) in October was at a 19-month year-on-year low of 8.39 per cent as against 10.7 per cent recorded in September. In October 2021, it was 13.83 per cent.

Retail inflation also fell to 6.77 per cent in October from 7.41 per cent in the preceding month, mainly due to prices easing in the food basket, though it remained above RBI’s comfort level for the tenth month in a row. Rural inflation continued to be higher at 6.98 per cent as against urban inflation of 6.50 per cent.

On the retail front, the inflation in the food basket was 7.01 per cent in October as against 8.6 per cent in September, according to the data released by the National Statistical Office (NSO) on Monday. Year-on-year, retail inflation was 4.48 per cent in October 2021.

The decline in the rate of wholesale price index (WPI)-based inflation in October is primarily due to a decline in commodity prices. However, a weaker rupee and high food prices will continue to put pressure on inflation figures. This was also the first time that the WPI fell below the double-digit mark in 18 months, having touched a high of 15.88% in May. Inflation in primary articles was 11.04% while food articles inflation rose to 8.33% from 0.06% in October.The index for primary articles group increased by 2.72% to 181 in October from 176.2 in September. Prices of crude petroleum & natural gas went up 17.48% and food articles grew 2.03% in October as compared to September. Prices of non-food articles declined 0.53% and minerals dropped 3.78% in October as compared to September.

In the fuel and power group, the index declined by 1.65% to 155.2 in October from 157.8 in September. Coal prices rose 2.60% in October against September. — TNS

Some relief for RBI

• The fall in retail inflation has brought some relief for the RBI which has been struggling to bring it below the upper tolerance level of 6%
• The central bank has been tasked to keep inflation at 4% with a margin of 2% on either side
• Retail inflation in the food basket was 7.01% in October compared to 8.6% in the preceding month