WPI inflation for Nov surges to 7.52 per cent; puts pressure on RBI

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WPI inflation for Nov surges to 7.52 per cent; puts pressure on RBI
WPI inflation came in at 7.52 per cent for the month of November, way ahead of analysts and economists estimates of 7 per cent. The higher than expected inflation now puts pressure on the RBI to hike rates at its policy meeting slated for Dec 18. The WPI inflation for the month of Oct was 7 per cent.

The final inflation for the month of Sept also stood revised upwards to 7.05 per cent as compared to 6.46
The higher then expected inflation number for Nov was largely on account of food inflation, which accelerated in the month of November.

The index for 'Food Articles' group rose by 2.0 per cent to 256.4 (provisional) from 251.4 (provisional) for the previous month due to higher price of egg (8 per cent), condiments & spices (7 per cent), fruits & vegetables (6 per cent), beef & buffalo meat and fish-marine (5 per cent each), pork (4 per centt), urad and jowar (3 per cent each), moong, maize, ragi and wheat (2 per cent each) and arhar, mutton, masur, milk and barley (1 per cent each). However, the price of fish-inland (10 per cent), tea (5 per cent), gram (2 per cent) and  poultry chicken and rice (1 per cent each) declined. Interestingly, the onion index was down 5.1 per cent, on a month on month basis.

The fuel and power group, which has a weightage of 14.91 per cent in the index rose 0.4 per cent month on month. The manufactured products index on the other hand rose 0.2 per cent, month on month.

Today's inflation reading makes it almost certain that the RBI would hike rates when it meets to review its policy on December 18. Some also suggest that the ugly reading of inflation also increases the possibility of the RBI raising rates by as much as 50 basis points.


Read more about: wpi inflation, rbi, food articles
Story first published: Monday, December 16, 2013, 12:25 [IST]
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