December’s annual wholesale inflation surged to 2.37% from November’s 1.89% driven by manufactured products prices and a low base effect. The wholesale price index (WPI) was at 0.86% in the corresponding month last year.
Breaking down the wholesale inflation
Wholesale inflation can be divided into wholesale non-food inflation and wholesale food inflation. Out of which, the wholesale non-food inflation rose to 2.5% in December. The wholesale food inflation on the other hand eased a bit to 8.89% from the previous month’s 8.92%. Even though food inflation eased nominally, it has still been the main driver the inflation in the economy.
- Wholesale vegetable prices surged by 28.65% YoY
- Potato prices zoomed double
- Kitchen staples rose at 93.20%
- Onions rose by 16.81% YoY
- Fruit prices zoomed by 11.16% YoY
There may be seasonal corrections in the food prices which can moderate the inflation a bit.
Global Economic Environment
The global economic environment is still uncertain which is further inflating the prices of the products. The Brent crude prices rose in January 2025 and reached a three-month high. The core inflation may increase but it would be within 1% as anticipated for the near-term by experts.
While food prices are pulling the CPI retail inflation up, the core inflation is low as the metal prices have been declining. Compared to November’s inflation, only 10 core industries had higher inflation out of the total 21 industries.
Another silver lining is that on a YoY basis, the fuel prices declined this month so did the prices of minerals and power. The fuel and power prices declined by 3.8% in December, this is the fifth month of consecutive decline. The energy prices on the other hand along with mineral prices declined by 2.7% YoY, and this is also for the fourth month in a row.
Source: DH
______________________________________________________________________________________
Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.