Rising food and commodity prices, along with base effects, push wholesale inflation above expectations
India’s wholesale price inflation (WPI) turned positive in December, rising to 0.83 per cent year-on-year, reversing the deflationary print of –0.32 per cent in November, government data released on Wednesday showed.
The reading also came in well above market expectations of 0.30 per cent, indicating a faster-than-anticipated easing of deflationary pressures in the wholesale segment.
The rebound was largely driven by base effects and a pickup in food and global commodity prices, which lifted prices across primary articles and manufactured goods.
Food inflation saw a noticeable uptick, reflecting higher prices of vegetables, pulses and cereals, while fuel and power prices remained volatile amid global energy fluctuations. Manufactured product inflation also firmed up, suggesting that input cost pressures are beginning to build across industrial supply chains.
Economists said the return of WPI inflation to positive territory points to improving pricing power for producers, after months of deflation had squeezed margins, particularly in metals, chemicals, and basic manufacturing.
The December print strengthens expectations that wholesale deflation has likely bottomed out, even as consumer price inflation remains the primary policy focus for the Reserve Bank of India.
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Rajat Mishra leads business news coverage at Firstpost.com. An award-winning business journalist with over seven years of experience, he has worked across some of India’s leading newsrooms. His reporting spans the macroeconomy, financial markets, and India Inc., with a keen focus on decoding complex data and trends for readers.
An alumnus of the AJK Mass Communication Research Centre, Jamia Millia Islamia, Rajat can be followed on X at @RajatMishra9518. For story ideas and pitches, he can be reached at Rajat.Mishra@nw18.com. When not tracking numbers and policy moves, he enjoys wandering the Himalayas and exploring society beyond spreadsheets.
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