India’s wholesale inflation fell to a three-month low of 4.64 per cent in November, driven down by decline in prices of food articles, especially vegetables, and some easing in rates of petro products.
The Wholesale Price Index (WPI)-based inflation was 5.28 per cent in October and 4.02 per cent in November last year.
Food articles witnessed softening of prices with deflation at 3.31 per cent in November, against 1.49 per cent in October, government data released Friday showed.
Vegetables, too, became cheaper with deflation at 26.98 per cent in November, compared to 18.65 per cent in the previous month.
Inflation in the ‘fuel and power’ basket in November continued to rule high at 16.28 per cent, but was lower than 18.44 per cent in October. This was on account of lowering of prices of petrol and diesel, following a decline in global crude oil prices.
Separately in petrol and diesel, inflation was 12.06 per cent and 20.16 per cent, respectively, and for liquified petroleum gas (LPG), it was 23.22 per cent during October.
As per experts, easing of the WPI inflation was led by a deeper disinflation in prices of primary food articles, easing of inflation related to crude petroleum and mineral oils following the correction in retail fuel prices, and some impact of the appreciation in the rupee on the landed prices of imports.
“The recent trend of a year-on-year correction in food prices does not augur well for the strength of rural demand in the immediate term. However, factors such as weak post-monsoon rainfall and a delay in rabi sowing pose some uncertainty regarding how long food prices would remain in the disinflation zone,” Nayar said.
The recent stability in the crude oil prices and the rupee, the WPI inflation is expected to be in the range between 3.7-4.4 per cent in the remainder of second half for current fiscal.
The central bank lowered retail inflation projection to 2.7-3.2 per cent for the second half of the current fiscal, citing normal monsoon and moderate food prices. PTI