India’s wholesale price inflation (WPI) stayed in negative territory in November, falling 0.32% year-on-year, according to government data released on Monday. This follows a 1.21% decline in October, showing that price pressures at the wholesale level remain weak.
What Drove Wholesale Inflation in November?
The continued fall in WPI was mainly due to lower food prices, although the pace of decline slowed compared with the previous month. Wholesale food prices fell 2.6% in November, easing from a sharper 5.04% drop in October, suggesting some stabilization in food supply conditions.
Vegetable prices remained a major factor, declining 20.23% in November after a steep 34.97% fall in October. While prices are still significantly lower than last year, the smaller decline points to reduced deflationary pressure in this category.
Manufactured Goods and Fuel Prices
Prices of manufactured products, which have the highest weight in the WPI basket, rose 1.33% in November, slightly lower than the 1.54% increase recorded in October. This indicates moderate cost pressures in the manufacturing sector.
Fuel and power prices continued to decline, falling 2.27% in November compared with a 2.55% drop in the previous month. Lower energy prices helped offset the rise in manufactured product costs and kept overall wholesale inflation in negative territory.
Why This Data Matters
A negative WPI suggests subdued input costs for businesses and limited inflationary pressure at the wholesale level. However, the slower decline in food prices could reduce the scope for further easing in wholesale inflation in the coming months.
Markets and policymakers will now watch whether trends in food, fuel, and global commodity prices keep wholesale inflation under control and how this movement eventually impacts retail inflation and interest rate decisions.
Source: Government of India WPI data
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