India’s wholesale price inflation moderated to a four-month low of 0.2% in February from 0.27% in January, despite an acceleration in food and primary articles’ inflation rates, owing to a sharper year-on-year drop in manufactured products and fuel and power prices.
The Wholesale Food Index (WPI) picked up from 3.8% in January to 4.1% in February, while primary articles’ prices rose 4.5%, compared with 3.84% in the previous month. On a month-on-month basis, the WPI was 0.07% higher, with primary articles rising 0.22% and the Food Index up 0.17%.
Eight of 10 primary food articles recorded higher price rise than January, with five items recording double-digit inflation, including vegetables (19.8%), onion (29.22%), pulses (18.5%) and paddy (10.25%). Tomato prices surged 60.5% while Potato prices recorded a 15.3% spurt, after breaking a 12-month streak of deflation.
India Ratings and Research economists noted that inflation in onions and tomatoes has now been in the high double digits since August and November 2023, respectively. Cereals and wheat inflation hit a three-month high of 6.6% and 2.3%, respectively. Fruit prices dropped 4% in February, while eggs, meat and fish recorded a 0.47% year-on-year decline in prices, the mildest dip in three months.
Fuel and gas prices
Among non-food primary articles, crude petroleum inflation surged to a 14-month high of 16.65%. LPG prices which have been slashed by ₹100 earlier this month, rose 3.8% in February, compared to 0.4% in January. However, overall fuel and gas prices were 1.6% lower than February 2023, marking the sharpest deflation rate in three months.
Eight of 14 manufactured products’ categories recorded price drops from last February, with the overall segment seeing a 1.27% decline in prices, the steepest since October 2023.
February marks the fourth successive month that the WPI has risen on a year-on-year basis, after seven months of deflation. The Commerce and Industry Ministry raised the wholesale inflation rate for December 2023 to 0.86% from the 0.73% uptick estimated earlier.
“Positive rate of inflation in February, 2024 is primarily due to increase in prices of food articles, crude petroleum & natural gas, electricity, machinery & equipment and motor vehicles, trailers & semi-trailers,” the Ministry said in a statement.
