Wholesale prices rose during the unlock phase, triggering rise in prices of commodities
Wholesale inflation in the country worsened to 1.48 per cent in October, from 1.32 per cent in the previous month, official data showed on Monday. That marked the highest level of wholesale inflation - or the rate of increase in wholesale prices - in eight months. The latest data comes at a time when the country is undergoing the unlock phase in order to revive economy, which shrank a record 23.9 per cent in the April-June period due to the coronavirus (COVID-19) pandemic.
A rise in commodities such as food, fuel, power and manufactured products has fuelled inflation.
The rate of inflation based on Wholesale Price Inflation Food index decelerated to 5.78 per cent in October from 6.92 per cent in the previous month.
In vegetables, it eased to 25.2 per cent in October, from 36.5 per cent in the previous month. Wholesale inflation in pulses worsened to 15.9 per cent, from 12.5 per cent.
Both primary articles and food inflation came in at 4.7 per cent and 6.4 per cent respectively in October.
''Increase in core inflation suggests improvement in demand conditions, which have improved after COVID related lockdown was lifted. However, it will be too early to term this as a general recovery, a large part of this is due to festival related demand,'' said Devendra Kumar Pant, chief economist at credit ratings agency India Ratings.
"Rising retail food inflation and declined wholesale food inflation is a nightmare for policy makers. India Ratings expects demand to conditions to improve further, however, bigger question is whether increased demand will be sustained after festive season," he added.
Prices of fuel and power, however, continued to ease. with deflation - or negative inflation - quickening to 10.9 per cent in October, from 9.5 per cent in the previous month.
Wholesale inflation in manufacturing stood at 2.12 per cent last month, compared to 1.61 per cent in September. Inflation in a basket of manufactured items rose to a 19-month high of 2.1 per cent.
