Fuel Price Pushes October WPI Inflation to 4-Month High of 5.28%
WPI inflation rose to a 4-month high of 5.28 percent in October, mainly due to a spike in petrol and diesel prices.
Inflation based on wholesale prices rose to a four-month high of 5.28 percent in October, mainly due to a spike in petrol and diesel prices, even as food prices softened.
Food articles witnessed softening of prices with deflation at 1.49 percent in October, against 0.21 percent September, according to the government data. Vegetables too became cheaper with deflation at 18.65 percent in October, compared to 3.83 percent in the previous month.
Inflation in fuel and power basket in October spiked to 18.44 percent, from 16.65 percent in September. Individually, in petrol and diesel it was 19.85 percent and 23.91 percent, respectively, and for liquefied petroleum gas it stood at 31.39 percent for the month.
Among food articles, potato prices continued to rule high with 93.65 percent inflation in October. While onion witnessed deflation of 31.69 percent. The 5.28 percent inflation is the highest in four months, and a higher level of inflation was last seen in June at 5.68 percent.
The WPI inflation is in contrast to the retail or consumer price index-based inflation data released earlier this week. The October CPI inflation had cooled to a year-low of 3.31 percent.
The Reserve Bank of India mainly takes into account retail inflation data while formulating monetary policy. RBI maintained status quo on the benchmark interest rate in its fourth monetary policy review for the fiscal. However, it warned that volatile and rising oil prices and the tightening of global financial conditions pose substantial risks to the growth and inflation.
(With inputs from BloombergQuint)
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