WPI: The main reason for the rise in wholesale inflation was the huge increase in the prices of vegetables, especially onions.
WPI in December 2019
The government has suffered a setback on the wholesale inflation front. Wholesale inflation rose to 2.59 percent in December 2019 due to uncontrolled inflation of onions and vegetables. Earlier, wholesale inflation was recorded at 0.58 percent in November and 3.46 percent in December 2018. The biggest reason for the rise in wholesale inflation was the sharp rise in onion inflation by about 455 percent and vegetables by about 70 percent. Talking about food and food inflation, it became 13.24 percent in December, which was 11.08 percent in November. Retail inflation also reached a five-year top of 7.35 percent in December 2019.
According to data released by the Commerce Ministry, the main reason for the rise in wholesale inflation in December last year was the huge increase in the prices of vegetables, especially onions. In December 2019, the inflation rate of vegetables increased to 69.69 percent, from 45.32 percent in November. On the other hand, onion inflation was recorded at 455.83 percent last month, which was 172.20 percent in November, a month earlier.
Inflation of fruits decreased, milk increased
According to government data, the inflation of fruits fell to 3.51 percent in December 2019, from 4.32 percent in November. However, the wholesale inflation rate of milk rose to 2.64 percent, which was recorded at 1.60 percent in November 2019.
The wholesale inflation rate of non-food articles also increased to 7.72 per cent last month, from 1.93 per cent in November 2019. Non-food items account for about 4.11 per cent of the primary article.
In fuel and power and manufacturing negative zones
According to government data, the wholesale inflation of fuel and power increased last month but is still below zero at 1.46 percent, which was -7.32 percent in November 2019. On the other hand, inflation of manufacturing products also remains in the negative zone. In December 2019, it was -0.25 percent, which was -0.84 percent in November.
Retail inflation on top of 5 years
Retail inflation rose to 7.35 percent in December 2019. This is its highest level in five years and much more than the satisfactory level of Reserve Bank of India. Earlier it had gone up to 7.39 percent in July 2014. In December 2018, retail inflation stood at 2.11 per cent. In November 2019, it was at 5.54 per cent.
Food inflation in December rose to 14.12 per cent. In December 2018, it was down 2.65 percent. In November 2019 it was at 10.01 percent. Vegetable inflation reached 60.5 percent in December 2019. In November it was at 36 percent.