However, on a yr-on-yr (YoY) foundation, the Wholesale Price Index (WPI) information furnished by the Ministry of Commerce and Industry has risen exponentially over December 2020, when it stood at 1.95 per cent.
“The high rate of inflation in December 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum and natural gas, chemicals and chemical products, food products, textile and paper and paper products etc., as compared to the corresponding month of the previous year,” the ministry stated in its overview of ‘Index Numbers of Wholesale Price in India’ for December.
“The month over month change in WPI for the month of December, 2021 stood at (-) 0.35 per cent as compared to November, 2021,” it added.
As per the info, the first articles phase, which has one of many highest weightages within the WPI, elevated at a sooner charge of 13.38 per cent in December 2021 as in contrast to 10.34 per cent reported for November 2021.
In the gasoline and energy phase, which has a weightage of 13.15 per cent, the rise in inflation was recorded at 32.30 per cent, as in contrast to 39.81 per cent in November 2021.
Similarly, price of manufactured merchandise, which has a weightage of 64.23 per cent, elevated at a slower charge of 10.62 per cent from 11.92 per cent in November 2021.
However, the expansion charge of WPI meals index consisting of meals articles from the first articles group and meals merchandise from the manufactured merchandise group rose to 9.24 per cent from 6.70 per cent within the earlier month.
“The WPI inflation printed in double digits for the ninth consecutive month, easing only modestly in December 2021 from November’s high, with a jump in primary food and non-food inflation absorbing a part of the correction in other item,” stated Aditi Nayar, Chief Economist, ICRA
“The primary food inflation has spiked from the marginal 0.1 per cent in October 2021 to an unpleasant 23-month high of 9.6 per cent in December 2021, reflecting the unfavourable base, particularly for vegetables,” Nayar added.
According to Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research: “The data indicates that the incremental price pressures in the primary article and the fuel segments have eased in the previous month, although a fresh rise in global crude prices can make such a relief temporary.
“As anticipated, there’s a moderation within the wholesale meals class pushed by the seasonal drop in vegetable costs, together with a pointy drop in onion and potato costs. While the go via of upper enter prices to manufactured merchandise has continued in December 2021, the sequential progress is low at 0.22 per cent for that class due to the lack of momentum in demand restoration.”
D.R.E Reddy, CEO and Managing Partner at CRCL LLP, said: “The WPI has fallen month on month, primarily due to a excessive base.
“The wholesale inflation is expected to weaken as we move ahead in 2022, largely due to falling commodity and primary article prices. High food and vegetable prices remain a concern.”
Sunil Kumar Sinha, Principal Economist, India Ratings and Research, stated: “Going forward, fuel prices are expected to stay at the elevated levels because Brent crude has inched up to $81 per barrel in the international markets in January 2022.
“Flare up in Covid circumstances due to the Omicron variant will jeopardise the normalisation of world provide chains with an upward strain on transportation and distribution prices. Against this backdrop, India Ratings & Research expects the wholesale inflation to be in double-digits in remainder of the fiscal.”