India's Wholesale Inflation Turns Positive to 0.83% in December
Overview
India's Wholesale Price Index (WPI) surged to 0.83% in December, marking a significant shift from November's deflationary -0.32%. The uptick is driven by rising prices in manufacturing, minerals, food, and textiles, reflecting factory-gate price changes distinct from consumer inflation. This data signals evolving price pressures within the wholesale economy.
India's wholesale inflation has turned positive, with the Wholesale Price Index (WPI) reaching 0.83% in December. This marks a notable reversal from the -0.32% deflationary figure recorded in November.
Key Indicators Shift
The Ministry of Commerce and Industry announced the December WPI on Wednesday, January 14. This index tracks price changes at the factory gate, offering a perspective distinct from consumer price inflation.
Drivers of Inflation
Official data attributes the positive inflation rate to a broad-based increase across several sectors. Key contributors include other manufacturing, minerals, the manufacture of machinery and equipment, food products, and textiles. Prices for non-food articles rose by 2.76%, minerals by 1.62%, and food articles by 0.88% month-over-month.
Sectoral Movements
Within manufactured products, 13 out of 22 industrial groups saw price increases. Sectors like basic metals, chemicals, and textiles experienced MoM price hikes. Conversely, prices decreased in areas such as rubber and plastics, computer and electronic products, and beverages. Fuel and power segments showed mixed results, with electricity up 4.46% and coal by 0.66%, while crude petroleum and natural gas prices dipped slightly (-0.45%).
Economic Context
The shift from deflation to inflation at the wholesale level can influence subsequent consumer prices and indicates underlying economic activity. The WPI's base year is 2011-12, and it categorizes commodities into primary articles, fuel and power, and manufactured products.
