September 2020 wholesale price inflation at 7-month high

Contributed by the hike in the prices of the food items, wholesale price inflation shot up to a seven-month high of 1.32 per cent in September. The index turned positive in August for the first time since March.

The WPI-based inflation appears to be moving in sync with CPI-based retail inflation which shot up to an eight-month high of 7.34 per cent in September, mainly on account of rising prices of food items.

Although the RBI takes into account retail inflation while deciding the monetary policy stance, ICRA’s principal economist Aditi Nayar said, “Today’s data (on WPI inflation) further cements the likelihood of an extended pause from the Monetary Policy Committee (MPC).”

Before recording an increase of 0.16 per cent in August, the WPI inflation was in the negative territory for four straight months —April (-) 1.57 per cent, May (-) 3.37 per cent, June (-) 1.81 per cent and July (-) 0.25 per cent.

Inflation in food articles in September was at 8.17 per cent against 3.84 per cent in August. Vegetables as a category had inflation of 36.54 per cent in September, potato prices skyrocketed by 107.63 per cent from a year-ago period.

However, onions had deflation at 31.64 per cent and in fruits, the inflation was at (-) 3.89 per cent.

Prices of cereals came down with a deflation of 3.91 per cent during the month.