WPI inflation dips to 3.39% in October as food prices soften

New Delhi: In the second consecutive month of decline, wholesale inflation eased to 3.39 percent in October as food articles, led by vegetables, witnessed softening of prices. [caption id=“attachment_2893462” align=“alignleft” width=“380”]  Reuters[/caption] The wholesale price-based inflation, reflecting the annual rate of price rise, in September stood at 3.57 percent. In October 2015, WPI inflation was (-)3.70 percent. Wholesale Price Index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (-)9.97 percent in October. Inflation in this category had scaled a high of 28.45 percent in July. This was aided by inflation data for onion, which was at (-)65.97 percent. Pulses inflation continued to rule high at 21.80 percent in October, according to the Commerce Ministry data. Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 percent. Inflation in fruits rose 6.45 percent during the month. Overall, the food inflation basket showed moderation with inflation at 4.34 percent in October, as against 5.75 percent in September. The inflation print for manufactured articles read at 2.67 percent in October compared to 2.48 percent in the previous month. The rate of inflation in sugar was at 29.63 percent and that for petrol was 3.57 percent. The WPI inflation for August has been revised upward at 3.85 percent against provisional estimate of 3.74 percent. Data for October retail inflation is expected later in the day. The all-powerful Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 percent to 6.25 percent. While he had signalled more tolerance towards inflation, the easing in CPI data was in line with the RBI’s forecast for average 5 percent inflation in fourth quarter of 2016. This, many expect, would create more room for interest rate cuts.