NEW DELHI: India’s wholesale price inflation softened to a four-month low of 1.22 per cent in December from 1.55 per cent in November as food items entered the deflationary zone. According to data released by the Ministry of Commerce and Industry on Thursday, prices of food articles fell 1.11 per cent after rising 3.94 per cent last month.
Prices of non-food articles rose 3.13 per cent against a rise of 8.43 per cent in the previous month. Manufactured items saw inflation jumping to 4.24 per cent in December from 2.97 per cent the previous month. However, core WPI inflation (which does not include food and fuel items) rose to a two-year high of 4.2 per cent and experts say, this may prevent the RBI from further rate cut.
"The rise in core WPI inflation could add to upside pressure on core CPI inflation. However, excess capacity conditions will limit pass-through to retail prices," said Gaura Sen Gupta, economist at IDFC First Bank.
Data released last week showed retail inflation falling to 4.59 per cent in December from 6.93 per cent in November that brought the CPI back within the Monetary Policy Committee’s target range of 2-6 per cent for the first time since March 2020. The next MPC meeting is scheduled from February 3-5.