Wholesale Price Inflation Rises to 2.37% in December 2024

India’s wholesale price inflation increased to 2.37% in December 2024, up from 1.89% in November, primarily driven by rising prices in manufactured goods, non-food articles, and fuel and power.

Key Contributors to Inflation:

• Manufactured Products: Prices rose by 2.14% in December, making a significant impact on the overall inflation rate.
• Non-Food Articles: Inflation in this category surged to 2.46%, reversing the 0.98% deflation seen in November, driven by higher costs in sectors like oilseeds.
• Fuel and Power: The sector saw a deflation of 3.79%, an improvement from the 5.83% deflation in November.

Food Inflation Trends:

• Overall Food Inflation: Slightly eased to 8.47% in December from 8.63% in November.
• Vegetables: Continued to experience high inflation at 28.65%, a marginal increase from 28.57% in November.
• Potatoes: Inflation remained very high at 93.20%.
• Onions: Inflation rose to 16.81%, up from 14.23% in November.

Retail Inflation Comparison:
Retail inflation, as measured by the Consumer Price Index (CPI), dropped to a four-month low of 5.22% in December, down from 5.48% in November, signaling a reduction in consumer price pressures.

Monetary Policy Implications:
The increase in wholesale inflation, alongside the decline in retail inflation and a slowdown in economic growth to 6.4% in 2024-25, could lead the Reserve Bank of India to consider lowering interest rates in its upcoming February meeting.