Inflation in India’s wholesale prices ticked up to 1.84% in September from 1.31% in August, with food prices surging to a two-year high of 9.5% from August’s 10-month low of 3.3%, as vegetables became nearly 49% costlier, marking the sharpest surge in 14 months.
Potato and onion prices were up 78.1% and 78.8%, respectively, in September, accelerating from the previous month, while tomato prices zoomed 74.5%, reversing course from a 53% decline in August. Fruits and pulses inflation eased marginally but remained high at 12.2% and 13%, respectively.
Cereals and paddy inflation eased fractionally to 8.1%, but wheat prices rose at a faster pace of 7.6% during September. Milk inflation cooled a bit to 3.2%, while eggs, meat and fish prices fell 0.8%, marking the second successive month of year-on-year decline in prices.
Manufactured food products recorded an inflation of 5.5% in September, while vegetable and animal oils and fats were up 10.5%, albeit on a benign base last year when prices had fallen for both.
Despite the rebound in food price rise, the Wholesale Price Index (WPI) saw a mild uptick thanks to fuel and power prices falling over 4% from last September, and manufactured products inflation easing a tad to 1%.
On a month-on-month basis, the WPI was up a mild 0.06%, the food index seeing the highest gain of 1.1%, while manufactured goods and primary articles’ prices inched up 0.14% and 0.41%, respectively. Fuel and power prices fell 0.8% from August 2024 levels.
With oil and commodity prices seeing an uptick this month, amid escalation of tensions in West Asia, and food price rise expected to stay elevated, most economists expect the WPI to rise further in October. ICRA chief economist Aditi Nayar reckoned wholesale inflation could be in the range of 2%-2.5% in October, noting that the second half of 2024-25 could see a “faster-than-anticipated rise” in prices if commodity prices and geopolitical conflicts flare up further.
Rajani Sinha, chief economist at CareEdge Ratings expects inflation to average around 2.5% from October to March 2025, citing food price risks, the potential impact on supply chains and energy prices if ongoing conflicts widen, and the economic stimulus in China that has fired up prices of global commodities, particularly industrial metals, over the past couple of weeks.
Published – October 14, 2024 06:37 pm IST
