WPI inflation eases slightly to 2.31% in Jan from 2.37% in Dec

Informist New Delhi

 India's WPI inflation cooled marginally to 2.31% in January from 2.37% in December despite an unfavourable base effect as a big decline in food prices brought down overall inflation, data released Friday by the commerce ministry showed. WPI inflation stood at 0.33% in January 2024.

At 2.31%, wholesale inflation for last month is below consensus expectations. According to an Informist poll, WPI inflation was seen rising to 2.6% in January. So far in 2024-25 (Apr-Mar), WPI inflation has averaged 2.2%. In FY24, it averaged (-)0.7%. Meanwhile, the November print was revised higher to 2.16% from the provisional estimate of 1.89%. 

In January, the food index of the WPI was down 2.3% on month--the largest sequential fall in 16 months--with vegetables playing a key role. While the vegetable index was down 22.7% on month, that of tomato slumped 40.4%. The indices for potato and onion were lower by 19.4% and 23.5% in January from December. 

Vegetables apart, prices of pulses were also lower in January from the previous month, although those of cereals and fruits increased. On the whole, food articles inflation fell to a five-month low of 5.88% in January.

Outside of food, price momentum was in the positive territory with the index for the fuel and power group up 0.5% on month. The index for manufactured products, which make up nearly a third of the WPI, inched up by a marginal 0.1%, pushing up core WPI inflation to 0.9% from 0.7% in December. The unexpected fall in wholesale inflation comes after the more closely tracked CPI inflation dropped more than anticipated to 4.31% in January.