Wholesale prices based inflation eased further to 40-month low of 0.16 percent in October, as against 0.33 percent in September due to subdued prices of non-food articles and fall in prices of manufactured items, government data showed on Thursday.
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The annual inflation, based on monthly wholesale price index (WPI), was at 5.54 percent in October 2018. The previous low was in June 2016 when the Wholesale Price Index (WPI)-based inflation was a negative 0.1 percent.
The rate of price rise for food articles was at 9.80 percent during the month, while for non-food articles it stood at 2.35 percent, showed the data released by the Ministry of Commerce and Industry.
For manufactured products, the wholesale inflation was at (-)0.84 percent in October 2019.
The wholesale inflation in potato remained in the negative zone at 19.60 percent (from -22.50 percent in September).
However, for vegetables, the inflation jumped to 38.91 percent in October from 19.43 percent a month ago, while that for pulses, it remained elevated at 16.57 percent as compared with 17.94 percent.
For fruits, it eased to 2.72 percent during the month as against 6.67 percent in September. While wholesale inflation in manufactured products was (-)0.84 percent in October 2019.
"The sequential dip in the WPI inflation in October 2019 was led by core items, fuel and power, minerals, and crude petroleum and natural gas, whereas inflation for primary food and non-food articles, and manufactured food products recorded an uptick," said Aditi Nayar, economist at ICRA.
Among other articles, in the WPI basket, the inflation for the fuel and light category declined further to -8.27 percent
Rahul Gupta, currency research head, Emkay Global Financial Services, said, "The data in wholesale prices signals that there is still lack of demand in segments such as manufacturing, metals, and chemical products. While only a surge in vegetable prices led to a rise in WPI from the market forecast. The continued weakness in WPI along with slowing growth will induce the RBI (Reserve Bank of India) to cut repo rate again in December."
The retail inflation for the month hit a 16-month high of 4.62 percent due to soaring prices of food articles, including fruit and vegetables, according to data released by the Ministry of Statistics and Programme Implementation on Wednesday.
The RBI takes into account the retail inflation data to decide on its bi-monthly monetary policy announcement, which is due early next month.
(With PTI inputs)
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Updated Date: Nov 14, 2019 16:54:51 IST