NEW DELHI: The wholesale price index (WPI)-based inflation moderated to six-month low of 10.66% in September from 11.39% in the previous month, on account on softening food prices, however it is still in double digits. Experts feel that the inflation rate may average to double digits in the current financial year.
The moderation was on account of the food basket, which witness deflation of 4.69%. Vegetable prices kept on falling for the 10th month in a row by 32.45%. However, protein items such as eggs, meat, fish and pulses saw the inflation rate inching up to 5.18%.
Non-food primary articles, however, saw the inflation rate inching up to 29.4% from 28.76% with all the sub-category of showing increase. Inflation rate in fuel and power declined to 24.81% from 26.09%. However, inflation in petrol and diesel remained elevated at 54.85% and 51.80%, respectively, in September.
“The sequential decline in the WPI inflation in September 2021 relative to August 2021 benefitted from primary food items slipping into a deeper deflation of 4.7% (eight-month low), with a sharp decline in vegetable prices, and a base-effect led easing in the inflation for fuel and power,” Aditi Nayar, chief economist at ICRA, said. Nayar cautioned that the WPI inflation rate may rise in October 2021, and remain in double-digits in Q3.