India’s wholesale price index (WPI) inflation eased to 8.39 per cent in October – helped by a fall in prices of fuel and manufactured goods – news agency PTI said Monday. This is the first time in 19 months WPI inflation has been recorded in single digits; the previous single-digit figure was 7.89 per cent in March 2021.
October figures are down from 10.7 per cent in September and 12.41 per cent in August, and are a far cry from the all-time high of 16.6 per cent in May.
“Decline in rate of inflation in October 2022 is primarily contributed (to) by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment; textiles; other non-metallic mineral products; minerals, etc.,” the commerce and industry ministry was quoted by PTI.
October inflation in food articles was 8.33 per cent. Inflation in vegetables prices was 17.61 per cent as against 39.66 per cent. ‘Fuel and power’ inflation was 23.17 per cent and for manufactured products it was 4.42 per cent.
Consumer price index inflation (CPI), or retail inflation, figures are due later today. A poll of 47 economists by news agency Reuters indicates CPI will also slow – from 7.41 per cent in September to an expected 6.73 per cent for October.
Forecasts ranged from 6.40 per cent to 7.35 per cent, with three-quarters expecting it to be under 7 per cent.
RBI governor Shaktikanta Das said last week at the 2022 Hindustan Times Leadership Summit that he too expects it to be below 7 per cent.
READ | Inflation will be under 7% in October: RBI governor at HTLS 2022
Whatever the final figure is, it is expected to remain well above the 6 per cent upper limit of the Reserve Bank of India’s tolerance band – a level Das defended.
Asked why the figure had overshot the upper limit for three consecutive quarters, the RBI chief attributed it geopolitical shocks like the war in Ukraine.
The RBI considers retail inflation when formulating monetary policy; the central bank hiked interest rates by 190 basis points in the May-September period to tame inflation figures that stayed above the tolerance band.