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Wholesale inflation in negative zone for 7th mth
Contracts 0.52% in Oct on easing food items’ prices
Deflation
- WPI deflation widened slightly to 0.5% in Oct from 0.3% in Sept
- Fall in prices of chemicals, electricity, textiles, basic metals
- Strong economic growth, resilient demand keep some pressure on inflation
New Delhi: Wholesale price inflation remained in the negative territory for the seventh month in a row in October at (-) 0.52 per cent on easing prices of food items. Experts said some near-term upside risks to the WPI inflation could emanate from volatile vegetable prices, uptrend in domestic prices of most food items as well as an unfavourable base.
The wholesale price index (WPI)-based inflation rate has been in the negative zone since April and was at (-) 0.26 per cent in September, 2023. In October last year, WPI was at 8.67 per cent. “The negative rate of inflation in October 2023, is primarily due to fall in prices of chemicals and chemical products, electricity, textiles, basic metals, food products, paper and paper products, etc. as compared to the corresponding month of previous year,” the commerce and industry ministry said on Tuesday.
A negative WPI inflation, technically termed as deflation, means that overall wholesale prices have been falling year-on-year. As per the data, inflation in food articles eased to 2.53 per cent in October. It was 3.35 per cent in the previous month. While inflation in vegetables and potatoes cooled to (-) 21.04 per cent and (-) 29.27 per cent respectively, the annual rate of price rise in onion continued to rule high at 62.60 per cent in October. Pulses and paddy continued to witness high inflation of 19.43 per cent and 9.39 per cent respectively.
ICRA Ltd Chief Economist, Head (Research & Outreach) Aditi Nayar said “the WPI deflation widened slightly to 0.5 per cent in October 2023, from 0.3 per cent in September 2023, in year-on-year (YoY) terms. This was led by a sharp turnaround in crude petroleum and natural gas print to a deflation, and a softening in the inflation for primary food articles, mainly vegetables. The fuel and power basket inflation was at (-) 2.47 per cent in October, against (-) 3.35 per cent in September. In manufactured products, the inflation rate was at (-) 1.13 per cent, as against (-) 1.34 per cent in September.”
Barclays MD & Head of EM Asia Economics, Rahul Bajoria said overall, inflation continues to stay broadly in check, with a stable rupee, manageable energy costs, and a countercyclical tax policy on fuel prices helping keep inflation in a stable range.
