High prices of fuel, power and manufactured goods key drivers, show data.
India’s wholesale inflation accelerated to a nine-month high of 3.1% in January, driven by fuel and power, and manufactured products, data released by the commerce and industry ministry showed on Friday.
Wholesale price inflation was 2.59% in December. The annual inflation, based on the monthly wholesale price index (WPI), was 2.76% in January 2019. Inflation in fuel and power was 3.42% compared with a negative 1.46% in December 2019.
In manufactured products, which have a 64.23% weight in the index, the rate was 0.34% in January from a negative 0.25% in the trailing month. “The slight increase in manufactured products inflation bodes well for the manufacturing industry,” said Madan Sabnavis, chief economist at CARE Ratings.
Inflation for manufactured food items recorded a considerable uptick led by a fairly broad-based spike in various edible oils and dairy products, and is expected to sustain in the coming months, said ICRA principal economist Aditi Nayar. While inflation in food articles slowed to 11.5% from 13.24% in December and in onion to 293.3% from 455.8% that in potato, was 87.8% in January visa-vis 45% in December.
“The rate of inflation based on WPI Food Index consisting of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group decreased from 11.05% in December, 2019 to 10.12% in January, 2020,” the ministry said in a statement.
Official data released Wednesday showed India’s retail inflation firming up to a 68-month high in January at 7.59%.