India’s wholesale prices decreased less-than-expected in December and the pace of decline slowed for a fourth straight month, data from the Ministry of Commerce & Industry showed Thursday.
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The consumer price index numbers also showed that food inflation rose higher – to 6.4 percent as against 6.07 percent in the month before. The highest pick up was in vegetables and pulses where it rose by around 20 percentage points over the last four months.
“The annual rate of inflation, based on monthly WPI, stood at -0.73% (provisional) for the month of December, 2015 (over December, 2014) as compared to -1.99% (provisional) for the previous month and -0.50% during the corresponding month of the previous year”, read a government statement.
The statement said the build-up inflation rate in the financial year so far was 0.74 percent as compared to a build-up rate of -0.89 percent in the corresponding period of the previous year.
Pushing up prices of food articles, prices of pulses shot up 56 per cent in December.
The WPI for manufactured products fell 1.36 per cent in December reflecting India Inc’s loss of pricing power.
Apart from the Index of Industrial Production, the central bank also looks into retail inflation data while firming up its monetary policy stance.
Inflation for October has been revised to (-)3.70 per cent from the provisional estimate of (-)3.81 per cent.
During 2015, the RBI has cut policy interest rates by 125 bps but banks have transmitted half of it to borrowers.
During December, the rate of price rise in potato was (-)34.99 percent, while in egg, meat and fish it was 5.03 percent.
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Although the impact of favourable bases for both the wholesale and consumer price inflation gauges has started to diminish from September, analysts don’t see any sharp upward spiral in price pressure in the coming months.
