WPI inflation surges to 14.23 per cent in November on the back of higher food prices – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/economy/indicators/wpi-inflation-surges-to-14-2-per-cent-in-november/articleshow/88271540.cmsSynopsis

​​​Higher wholesale prices could feed into retail prices as demand returns in the economy. Many of the FMCG companies have already hiked prices as they faced margin pressures and chose to pass on the input price hike to consumers.

Wholesale prices or WPI inflation surged to 14.23 per cent on the back of higher food prices. It had jumped to a five-month high of 12.54 per cent in October. This is the highest recorded WPI inflation level in the 2011-12 series.

Vegetable inflation along with prices of egg and meat hardened in the month of November. Primary articles also saw a rise in prices.

Inflation in fuel and power basket was higher at 39.81 per cent in November, as against 37.18 per cent in October. The food index more than doubled to 6.70 per cent as compared to 3.06 per cent in the previous month.

Crude petroleum inflation was at 91.74 per cent during the month under review, as against 80.57 per cent in October. However, manufactured items saw moderation at 11.92 per cent, from 12.04 per cent in October.

Terming the spike in the WPI inflation to a high of 14.2 per cent as a shock, ICRA Chief Economist Aditi Nayar said most non-core categories have exhibited an inflation rate much steeper than expected.

The unseasonal surge in vegetable prices, as well as a rise in the inflation for egg, meat and fish, and condiments and spices underpinned the turnaround in the primary food inflation to a 13-month high of 4.9 per cent in November 2021, from a disinflation of 1.7 per cent in the previous month, she said.

Global supply bottlenecks have led to increase in raw material costs along with higher crude oil prices which has put pressure on manufactured goods.

Higher wholesale prices could feed into retail prices as demand returns in the economy. Many of the FMCG companies have already hiked prices as they faced margin pressures and chose to pass on the input price hike to consumers.

Retail inflation for November rose to 4.91 per cent on the back of higher vegetable prices. The RBI has kept the full-year target for the current fiscal at 5.3 per cent with inflation peaking in fourth quarter at 5.7 per cent.

The RBI takes into account retail inflation for arriving at its monetary policy decisions.

(With inputs from PTI)

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