WPI breaks 18-mth double-digit streak in October, eases to 8.39%

According to preliminary figures released by the Commerce Ministry on Monday, India’s wholesale price index-based inflation in October decreased to 8.39% on an annual basis from 10% in September and 13.83% in October 2021.

Since March of last year, it hasn’t fallen below the double digit threshold until now, according to information made public by the Ministry of Commerce and Industry.

WPI inflation has been in double digits since April 2021, with the September reading coming in at 10.79%. 13.83% inflation was recorded in October 2021.

The ministry stated in a news release that the decrease in the rate of inflation in October 2022 was principally caused by price decreases in mineral oils, basic metals, fabricated metal products, except for machinery and equipment, textiles, other non-metallic mineral products, minerals, etc.

Primary article inflation increased to 11.04% from 7.38% in the same time last year. Inflation for food items increased to 8.33% from 0.06% in October 2021.

Compared to September, when vegetable inflation was 39.66%, this month it was 17.61%. Inflation in October was 4.42 percent for manufactured goods and 23.17 percent for the “Fuel and Power” basket.

The Reserve Bank considers retail inflation when determining its monetary policy. Later in the day, the retail inflation rate for October would be announced and is predicted to be less than 7%. To combat persistently high inflation that has exceeded the RBI’s upper tolerance range of 6% for three consecutive quarters, interest rates were increased by 190 basis points between May and September, bringing them to 5.90%.

Wholesale price inflation for natural gas and crude oil decreased from 43.57% in October 2022 to 86.36% in October 2021.

Inflation for manufactured goods in October was 4.42%, down from 12.87% in the same month last year. Inflation for fuel and electricity decreased to 23.17 % from 38.61 % in October 2021.

With this, India’s wholesale inflation has ended a run of 18 straight months in double digits.

When compared to September 2022, the WPI index changed by 0.26% from month to month in October 2022.

India’s retail inflation eases to 3-month low in October; Stays above RBI comfort band again

Retail inflation in India dropped significantly from 7.41 percent in September 2022 to 6.77 percent in October.

For the tenth straight month, the number has stayed above the RBI’s tolerance range of 2 to 6 percent.

Sequentially, headline inflation increased to 0.80% from 0.570% the month before.

Positive base effect is to blame for the decrease in headline inflation. However, the inflationary pressure is also being pushed forward by supply-chain disruptions brought on by ongoing geopolitical events and a global hardening of commodities prices.

Inflation in the food industry for October was 7.01 percent, down from 8.6 percent in September.

Vegetable prices increased by 7.7% annually. In the meantime, fuel and light inflation decreased to 9.93% from 10.39% in September.

Exogenous price shocks are one of the causes of India’s problems with growing consumer prices, but economists feel there are still many other variables that will lead to an elevated inflation rate, thus the picture is still gloomy. In fact, rating organisations, like Moody’s, recently lowered their projections for India’s development because they were based on high inflation and high interest rates.

Shaktikanta Das, governor of the Reserve Bank of India (RBI), had predicted that the inflation rate will be less than 7% in October.

“We anticipate the October figure to be less than 7%. Therefore, inflation is a challenge that we are now addressing and addressing well, Das was reported as saying in the media.

The uncertain character of the Russia-Ukraine war aggravated supply side disruptions in the post-pandemic world that was merely going through a nascent recovery from economic shocks, raising concerns about higher inflation among central banks around the world, including India.

The Monetary Policy Committee (MPC) of the RBI recently met out of turn on November 3 to debate and produce the report that would be issued to the federal government for failing to sustain the inflation mandate.

The RBI is regarded to have failed in managing price increases under the flexible inflation targeting framework implemented in 2016 if the CPI-based inflation goes outside the 2–6% range for three consecutive quarters.

According to predictions from the RBI, inflation will decline to 6.5% in the third quarter of FY23 and 5.8% in the fourth.

The Commerce Ministry earlier today announced figures for October’s wholesale pricing index-based inflation in India, which came in at 8.39% on a yearly basis. With this, India’s wholesale inflation has ended a run of 18 straight months in double digits.