WPI Inflation Rises To 0.83% In December; Food Inflation Flat at 0%
India's wholesale price inflation reversed to positive territory at 0.83% in December from -0.32% deflation in November, significantly exceeding economist estimates of 0.36%. The turnaround was driven by surge in food articles like pulses and vegetables, with food inflation moving to flat 0% from -2.6% decline in November, while manufactured products inflation accelerated to 1.82% from 1.33% in the previous month.
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India's Wholesale Price Index (WPI) inflation turned positive in December, marking a significant shift from the deflationary trend observed in the previous month. The latest government data shows wholesale prices rising by 0.83% year-on-year, representing a substantial turnaround from the -0.32% deflation recorded in November.
Key Inflation Metrics
The December WPI inflation reading not only reversed the deflationary trend but also exceeded market expectations. The actual figure of 0.83% came in significantly higher than economist estimates of 0.36%, indicating stronger price pressures at the wholesale level than anticipated.
| Metric | Value |
|---|---|
| December WPI Inflation (YoY): | 0.83% |
| November WPI Inflation: | -0.32% |
| Economist Estimates: | 0.36% |
| Monthly Change: | +1.15 percentage points |
Sectoral Breakdown
The rise in wholesale price inflation was driven by multiple factors across different sectors. Food inflation moved to a flatline at 0.00% compared to a decline of 2.60% in November, indicating stabilization in food price trends.
| Category | December | November |
|---|---|---|
| Food Inflation: | 0.00% | -2.60% |
| Manufactured Products: | 1.82% | 1.33% |
Price Drivers
The surge in wholesale prices was particularly driven by higher costs of food articles, including pulses and vegetables. Additionally, manufactured products showed accelerated price growth at 1.82% compared to 1.33% in November, contributing to the overall inflationary pressure.
Lower primary articles' prices also played a role in shaping the December inflation dynamics, as the government data revealed the complex interplay of various commodity categories in determining overall wholesale price movements.
Market Implications
The shift from negative to positive wholesale price inflation represents a notable change in India's price dynamics at the producer level. The 1.15 percentage point increase from November's -0.32% to December's 0.83% indicates substantial acceleration in wholesale price growth, with implications for broader economic policy considerations.
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