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Updated on: Monday, November 15, 2021, 02:04 PM IST

Wholesale price-based inflation spikes to 12.54% in October; 'cause for concern' say experts

Accordingly, the annual rate of inflation, based on wholesale prices, rose to 12.54 per cent last month from 10.66 per cent in September. |

Accordingly, the annual rate of inflation, based on wholesale prices, rose to 12.54 per cent last month from 10.66 per cent in September. |

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Wholesale price-based inflation spikes to 12.54 per cent in October, against 10.66 per cent in September.

Higher prices of primary goods along with food articles and fuel cost stiffened India's October 2021 wholesale inflation on a sequential and year-on-year basis.

Accordingly, the annual rate of inflation, based on wholesale prices, rose to 12.54 per cent last month from 10.66 per cent in September.

Similarly, on a YoY basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry has risen exponentially over October 2021, when it stood at 1.31 per cent.

"The high rate of inflation in October 2021 is primarily due to rise in prices of mineral oils, basic metals, food products, crude petroleum and natural gas, chemicals and chemical products, etc., as compared to the corresponding month of the previous year," the ministry said in its review of 'Index Numbers of Wholesale Price in India' for October.

"The month over month change in WPI index for the month of October, 2021 (as compared to September, 2021) was 2.28 per cent."

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ICRA Chief Economist Aditi Nayar said the core index recorded a month-on-month jump of 1 per cent with a widespread uptick across the sub-groups reflecting the pervasive commodity price pressures.

"With demand reviving, we expect producers to start passing through higher input and freight costs, even as the tax cuts on fuels will offer them a breather. Led by the base effect, we expect WPI inflation to moderate in the months ahead, and print at 7.5-8.5 per cent in March 2021," Nayar added.

D.R.E Reddy, CEO & Managing Partner, CRCL LLP, “After a rise in CPI inflation, we are witnessed a rise in wholesale price index (WPI) inflation. The WPI data has risen to a 5-month high which is higher than expected. The higher manufactured products and fuel inflation have led to a rise in WPI.

"The rise in the WPI is a cause of concern as the industries may pass it on to the end consumers. The persistent rise in inflation points to a rise in demand. On the positive side, the rise in demand points to a recovery in growth as lockdown is eased across the country.

The month-on-month rise may hasten RBI's decision to unwind the excess liquidity, tighten the policy rates earlier than expected.”

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Published on: Monday, November 15, 2021, 02:04 PM IST
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