NEW DELHI: India’s annual wholesale price-based inflation, a proxy figure for producers’ prices, accelerated to a record high in November, boosted by increases in manufacturing and food prices, fuelling concerns of rising inflationary pressure.
Annual wholesale price-based inflation (INWPI=ECI) rose to 14.23% in November, its highest since April 2005, according to data from Refinitiv, against 12.54% the previous month, government data showed on Tuesday.
The gap between retail and wholesale price-based inflation has widened in recent months as many companies and retailers are struggle to absorb galloping input costs that threaten their bottom lines.
Wholesale inflation has remained in double-digits for the eighth month in a row while headline retail inflation is hovering near 5%, or within the central bank’s target of 2% to 6%.
Consumer price-based inflation, the main gauge monitored by the monetary policy committee of the Reserve Bank of India, rose 4.91% in November from the corresponding month last year, speeding up from October’s 4.48%, separate data showed. read more
Economists said that despite a softening in global prices of crude oil and the government’s recent cut in fuel tax, inflationary pressures are building for households as firms try to pass on rising costs as domestic demand picks up.
Wholesale fuel and power prices rose 39.81% on the year versus 37.18% in October, while manufactured product prices rose 11.92%, against 12.04% in the prior month.
Wholesale prices of food accelerated at a 6.70% pace in November from a year earlier, versus 3.06% the previous month.
The central bank’s Monetary Policy Committee left interest rates on hold last week, saying growth was a priority as it warned of risks from inflation and the new Omicron variant of coronavirus on the economic recovery.
India’s economy expanded 8.4% in the September quarter from a year earlier, the fastest pace among major economies, but economists say the pandemic situation is a wild card.