India

Wholesale inflation exceeds 13 and a half percent

New Delhi. The rate of wholesale inflation has moderated slightly in December, yet it remains above 13.5 per cent. It was increasing continuously for the last four months and in the month of November it was at a record high of 14.23 per cent. It decreased slightly in December. According to the data released by the government on Friday, the rate of inflation on the wholesale price index was 13.56 percent in the last month i.e. December. Retail inflation was also above five and a half per cent in the month of December.

However, high inflation in November 2021 was at record high mainly due to rise in prices of mineral oil, base metals, crude petroleum products, natural gas, chemicals, food products etc. WPI inflation moderated slightly in December due to moderation in prices of some of these items. Due to the high inflation rate, both wholesale and retail, it is believed that the Reserve Bank of India (RBI) will not reduce policy interest rates in its next monetary review as well. RBI’s monetary policy will be announced on February 9.

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It is noteworthy that for the ninth consecutive month since April, the wholesale price-based inflation rate has remained in double digits. If we look at the year-on-year basis, it was 1.95 per cent in December 2020. This means that the wholesale inflation rate has increased seven times in a year. In fact, due to the increase in the prices of food items, the inflation has increased so much. Food inflation rose to a 23-month high of 9.56 per cent in December. It was 4.88 per cent in November. That is, it doubled in a month. Vegetable prices increased to 31.56 per cent in December from 3.91 per cent in November. Among food items, prices of pulses, wheat, cereals and paddy increased in December compared to November, while prices of potatoes, onions, fruits and eggs, meat and fish softened.

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