India’s Nov WPI inflation at 21-month low as food, commodity prices ease

By Aftab Ahmed and Nikunj Ohri

NEW DELHI (Reuters) – India’s annual wholesale price-based inflation rate (WPI) eased to its lowest in 21 months, signalling that price pressure in Asia’s third-largest economy is beginning to cool and policymakers might shift their focus to growth.

Food, energy and prices of manufactured products cooled down, hinting that a spike in input costs for companies due to the Ukraine conflict is now easing.

The WPI for November was 5.85% year-on-year, government data showed on Wednesday, lower than a Reuters analysts’ average forecast of 6.50% and 8.39% recorded in the previous month.

The latest print was lowest since February 2021, when WPI rate touched 4.83%.

The WPI rate on manufactured products was 3.59% from 4.42% in the previous month, food index inflation eased to 2.17% from 6.48% and energy cooled to 17.35% from 23.17%.

“The wholesale price inflation has come well below expectations,” ICRA economist Aditi Nayar said.

A decline in vegetable prices have also helped in compressing the overall WPI inflation, she said, adding that the WPI is likely to further decline to low-single digit in the next quarter on continuous falling commodity prices.

Earlier this week, the country’s annual retail inflation eased below its central bank’s upper tolerance level for the first time this year in November. While India’s annual industrial output contracted 4% in October, its weakest performance in 26 months.

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