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India December Wholesale Inflation Rate Eases To 4-Mth Low On Cheaper Food

Thursday,   14-Jan-2021   12:13 PM (IST)

India’s wholesale price inflation rate in December eased to a four-month low, dragged down by lower food prices, government data showed today. Wholesale prices rose 1.22% on year in December, the pace easing for the first time in at least six months. The print lagged a median forecast of a 1.30% annual expansion according to a Reuters poll of economists and was slower than previous month’s 1.55% rise. Wholesale food index rose 0.92% in December, the pace sharply easing from 4.27% expansion in the previous month. Wholesale prices of essential food items such as vegetables fell 13.2% in December from the earlier month’s 12.24% annual pace of expansion. Onion prices fell 54.69% in December, compared with a 7.58% fall last month. Wholesale potato prices rose 37.75% in December, the pace slowing from a 115.12% jump in November. Wholesale prices of pulses rose 9.69%, slowing from a 13.04% annual pace of gain in November. Milk prices rose 3.91% in December, compared with a 5.53% increase in the previous month. Wholesale prices of manufactured products, which has a 64.23% weightage in the WPI, rose 4.24% from a year earlier in December, which however quickened from an annual 2.97% expansion in November. Fuel and power costs fell 8.72% from a year earlier in December, the pace easing from a 9.87% annual contraction in November. Crude oil prices, India’s costliest import, rose for second consecutive month in December. Brent crude, a global marker for prices, closed 8.9% higher in December and hit an eight-month high of $52.48 per barrel during the month. India imports almost 85% of its crude oil requirements. The government revised October’s wholesale annual inflation reading to 1.31% annual expansion from an initial estimate of a 1.48% rise. Today’s data are provisional and can be revised later.