India’s wholesale price inflation slipped below 10% for the first time in 19 months this October, when it eased to 8.4% to 10.7% in September, thanks to base effects and cooling commodity prices.
This is the fifth successive month of wholesale inflation moderating since it hit a record high of 16.63% in May.
The inflation rate in October 2021 was 13.8% and was even higher at 14.9% in November last year, so economists at ICRA expect the base effect to intensify and bring headline wholesale inflation down to between 6% and 7% in November.
Wholesale food price inflation eased further in October to 6.5% from 8.1% in September while inflation in manufactured goods dropped to 4.4% from 6.3% a month earlier. Fuel and power inflation dropped to 23.2% in October from 32.6% in September, but price rise in primary articles remained sticky at 11% compared to 11.7% a month earlier.
Vegetables inflation moderated to 17.6% from 39.7% in September while potato inflation cooled mildly to 45% in October after surging to 49.8% in the previous month.
Cereals inflation remained sticky at 12% after staying over 11.8% for the previous two months, with wheat inflation rising from 16.1% in September to 16.25% in October.
“Wholesale inflation will continue to moderate on the back of the base effect as well as softening of global commodity prices especially energy and metals,” said Bank of Baroda economist Jahnavi. However, some food articles would tend to show a sharp uptick in prices, particularly vegetables and cereals, while pulses may inch up too, she cautioned.