Wholesale price inflation rises to 9-month high in Dec

The December print was also pushed up by the fading high base effect that had kept WPI deflationary for the first seven months of FY24. On a month-on-month basis, the overall index declined 0.9% in December, at the steepest pace in four months.

With the current print, WPI inflation has averaged (-)1.07% in April-December FY24 as against 11.69% in the comparable period of FY23. Among its three groups – ‘primary articles’ inflation has averaged 3.24% in April-December as against 12.61% in April-December FY23.

And that of ‘manufactured products’ and ‘fuel and power’ has averaged (-)1.85% and (-)5.74%, respectively, during the period as compared to 7.12% and 34.97% last year. In December, the inflation of ‘primary articles’ stood at 5.78%, ‘fuel and power’ at (-)2.41%, and ‘manufactured products’ at (-)0.71%.

“The CPI-WPI gap narrowed to 5% (in December) after remaining at 5.3%-5.4% in the last three months. The gap is narrowing with the faster pickup in WPI led by food articles. With signs of easing emerging in key food culprits like vegetables and pulses, the gap could narrow further with a greater easing in CPI relative to WPI,” said Anitha Rangan, economist, Equirius Securities.