NEW DELHI: Indian’s wholesale price-based inflation accelerated to 14.23% in November, more than a decade high, on account of high manufacturing and food prices, and experts claim that inflationary pressure will remain in double digits for next few months on account of Omicron fear, high commodity price and disruption in supply chain.
“We now forecast the WPI inflation to average 11.5-12.0% in FY2022, with the headline and core inflation expected to continue to print in double-digits over the next three months and one month, respectively,” added Aditi Nayar, chief economist, ICRA Ratings.
The wholesale price inflation is in double digit since last eight months in a row and experts claim that this will keep RBI at its toes, even when the CPI or retail inflation is within its limit at 4.91%.
According to the data released by the commerce and industry ministry on Tuesday, wholesale prices of food accelerated at a 6.70% pace in November from a year earlier, against 3.06% the previous month.
Wholesale fuel and power prices rose 39.81% on the year versus 37.18% in October, while manufactured product prices rose 11.92%, against 12.04% in the prior month.
“The high rate of inflation in November 2021, is primarily due to rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products etc. as compared to the corresponding month of the previous year,” the commerce ministry said.
“Sticky core inflation indicates that manufacturers are increasingly passing on the higher input costs to their output prices despite uneven recovery in demand. Since fuel is a major input into transportation cost, higher fuel prices push up the distribution cost further.” said Sunil Kumar Sinha, Principal Economist, Ind-Ra.
Food and fuel prices on high
Prices of food accelerated at a 6.70% pace in November from a year earlier; fuel and power prices rose 39.81% on year, while manufactured product prices rose 11.92%