India's Wholesale Prices Surge To 9-Month High To 0.73% In December

India saw a jump in wholesale inflation in December 2023, as it hit a nine-month high of 0.73% against 0.26% in November last year, according to government data published on Monday.

India's wholesale inflation which was in the negative territory for 7 months from April to October turned positive in November. According to the Ministry of Commerce and Industry, the positive rate of inflation in November was due to the increase in prices of food articles, machinery and equipment, other manufacturing, other transport equipment, and computer, electronics, and optical products.

The inflation for primary articles rose to 5.78% compared to 4.76% in the previous month. Meanwhile, the fuel and power and manufacturing sector contracted to (-)2.41 and (-)0.71% respectively.

"Positive rate of inflation in December 2023 is primarily due to increase in prices of food articles, machinery & equipment, other manufacturing, other transport equipment and computer, electronics & optical products etc," said the commerce and industry ministry in a statement on Monday.

In the last month, the inflation rate based on WPI Food Index surged to 5.39% compared to 4.69% in November 2023. On a sequential basis, the inflation rate stood at (-) 0.85% as against a surge of 0.26%.
The number comes a couple of days following the release of the retail inflation number which stood at a four-month high of 5.69% as against 5.55% in the month of November.

In its last policy meeting held in December, the Reserve Bank of India (RBI) kept the inflation aim unchanged at 5.4%. In the August policy, the Reserve Bank of India's Monetary Policy Committee (MPC) increased its CPI inflation forecast for FY24 to 5.4% from 5.1%.