Wholesale Inflation Hits 8-Month High: Discover Costlier Items

Wholesale inflation soared to an 8-month high, driven by surging prices of food, minerals, machinery, and more. In November, it hit 0.26 percent, after staying below zero for seven months. This surge echoes the recent climb in retail inflation, reaching 5.55 percent, its highest in three months. The Reserve Bank of India (RBI) maintained its stance, keeping interest rates unchanged despite the inflationary pressures.

Image Source -www.thehindu.com

Wholesale inflation recently surged to an 8-month peak, presenting a dual challenge alongside the escalating retail inflation. November witnessed a significant upturn in wholesale inflation after a prolonged stint below zero, standing at 0.26 percent. This upward spiral followed seven consecutive months of remaining in negative territory, predominantly attributed to escalating food prices. The Wholesale Price Index (WPI)-based inflation had consistently lingered below zero since April, plummeting to minus 0.52 percent in October.

The Ministry of Commerce and Industry attributed the November inflation surge to a steep rise in the prices of key commodities. Notably, food items witnessed a striking hike, reaching an 8.18 percent inflation rate in November, a notable jump from 2.53 percent in October. Additionally, minerals, machinery, electronic products, vehicles, and various manufacturing goods played pivotal roles in this inflationary surge.

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Simultaneously, retail or consumer price inflation also registered a climb, reaching 5.55 percent in November, marking a three-month high. This surge was largely propelled by the escalating costs of food items, aligning with the trajectory of wholesale inflation. Despite these inflationary pressures, the Reserve Bank of India (RBI) chose to maintain its steady stance. In its recent bi-monthly monetary policy, the RBI refrained from altering interest rates, highlighting its strategic stance amidst the growing inflation concerns.

The indications of rising food inflation in November and forecasts for December suggest sustained challenges in curbing inflationary pressures in the near term. This dual surge in wholesale and retail inflation presents a formidable challenge for policymakers and economic stakeholders alike, demanding calibrated measures to navigate these inflationary currents.