India’s wholesale price inflation quickened to the highest level in eight months, reaching 1.48% in October 2020 as per provisional data, compared with 0% in October 2019 and 1.32% in September this year.
The WPI Food Index inflation slowed from 6.92% in September 2020 to 5.78% in October, 2020, with vegetables inflation cooling down to 25.23% from 36.5% in September. Inflation in potato prices touched 107.7%, while onions registered 8.5% inflation in October.
The WPI for August has been revised upwards from 0.16% as reported earlier to 0.41%, as per final data compiled by the Office of the Economic Adviser, Department for Promotion of Industry and Internal Trade.
This revision assumes significance as August marked the first month since March that the WPI clocked positive growth, which was considered a sign of an industrial recovery with producers’ pricing power returning.
October’s numbers suggest that this trend has strengthened with manufactured group inflation hitting a 19-month high of 2.1%, and core inflation accelerated to the highest level in 18 months at 1.7%, according to a note by India Ratings and Research.
‘Not yet a recovery’
“Increase in core inflation suggests improvement in demand conditions, which have improved after [the] COVID-related lockdown was lifted. However, it will be too early to term this as a general recovery; a large part of this is due to festival related demand,” said Devendra Kumar Pant, chief economist at the rating firm. He termed rising retail food inflation and declining wholesale food inflation ‘a nightmare for policymakers’.