Wholesale inflation in December inched up to (-) 0.73 per cent in December against per cent (-) 1.99 per cent decline in November. Food prices last month shot up 8.17 per cent year-on-year, compared with a 5.20 per cent rise in November.
Pushing up prices of food articles, prices of pulses shot up 56 per cent in December as compared to the same of the previous year. Also, impacting food inflation, vegetable and onion prices rose 20 per cent and 26 per cent respectively.
Wholesale inflation has been rising for the fourth month in a row but this was the 14th straight month it remained in the negative territory.
The wholesale fuel prices dropped 9.15 per cent from a year ago in December, while prices of manufactured goods declined 1.36 per cent year on year, helping to keep the wholesale inflation in the negative territory.
Economists expect wholesale price inflation to inch up further in coming months. “With upside risks emanating particularly from the food basket one can expect the headline inflation to move in the upward direction in the coming months. Also, a marginal positive inflation is likely to seen by March,” Care Ratings in a note said.
The Reserve Bank mostly tracks the Consumer Price Index (CPI)-based retail inflation for its monetary policy decisions. The consumer inflation too has shown a rising trend. Consumer inflation edged up for the fifth straight month in December on rising food prices, posing risks to the Reserve Bank of India’s efforts to lower interest rates.
For the month of December, consumer prices rose 5.61 per cent from a year earlier, compared with November’s 5.41 per cent.