New Delhi, December 14, 2014 : .India’s November wholesale inflation was higher on a year-on-year and sequential basis.The annual inflation rate, which is based on wholesale price increases, was 14.23 percent last month, an increase of 12.54% in October.
Similar results can be seen on a YoY basis.The Wholesale Price Index (WPI), which is provided by the Ministry of Commerce and Industry, has increased exponentially since November 2020 when it was at 2.29 percent.
The ministry stated that November’s high inflation rate was primarily caused by an increase in the prices of crude petroleum, natural gas and mineral oils.
According to data, primary articles, which have one of the most weighted in WPI, grew at an even faster pace of 10.34 percent in November compared with 5.20% reported for October 2021.
The fuel and power sector, with a 13.15 percent weight, saw inflation rise to 39.81% from 37.18% in October 2021.
The cost of manufactured goods, with a weightage 64.23 percent, increased at an lower rate, 11.92%, compared to 12.04% in October.
Similarly, the growth rate of WPI food index consisting of food articles from the primary articles group and food products from the manufactured products group rose to 6.70 per cent from 3.06 per cent.
“The WPI print for November 21 clearly highlights the underlying inflationary pressures in the economy that is not apparent in the headline CPI print,” said Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research.
“There has been a steep sequential rise in inflation of primary articles and fuel and power, which stood at 5.6 per cent for both categories, clearly reflecting the continuous rise in commodity prices, including oil, coal and various metals,” Chowdhury added.
According to Aditi Nayar, Chief Economist, ICRA: “The spike in WPI inflation to a fresh all-time high of 14.2 per cent in November has come as a shock, especially with most non-core categories displaying an inflation rate that was much steeper than expected.
“The inflation for headline and core-WPI, and fuel and power was printed at all-time high levels in November 2021.A falling base is likely to push up the inflation rate for primary food articles further in the current month, in spite of an anticipated sequential moderation in prices of various food items.”
Sunil Kumar Sinha, Principal Economist, India Ratings and Research, said: “Sticky core inflation indicates that manufacturers are increasingly passing on the higher input costs to their output prices despite uneven recovery in demand.Since fuel is a major input into transportation cost, higher fuel prices push up the distribution cost further.
“Consequently, inflation in seven groups, namely textiles, paper and chemicals, rubber and plastics, basic metals, fabricated metals and furniture, has been in double-digits for six successive months now, with textiles, paper and chemicals touching a new record high in November 2021.”
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