Wholesale inflation in the country accelerated to 1.55 per cent in November, marking the highest level recorded in last nine months, government data released on Monday showed. Wholesale inflation — or the rate of increase in wholesale prices determined by the Wholesale Price Index (WPI) — worsened due to rising prices of manufactured products during the festival season, however easing food rates capped the upside. The latest reading comes at a time when the economy is showing signs of a rebound from a COVID-19-cased slowdown due to restrictions imposed in late-March.
Still, the wholesale price gauge recorded a better-than-expected reading compared with estimates. Analysts in a poll conducted by news agency Reuters had expected wholesale inflation at 1.62 per cent. The WPI-based inflation was recorded t 1.48 per cent in October, and 0.58 per cent in November last year.
Food inflation — or the rate of increase in the prices of food items — eased to 3.94 per cent last month, from 6.37 per cent in October, the data showed.
Vegetable prices continued to increase with inflation recorded at 12.24 per cent, especially potato in which inflation soared to 115.12 per cent.
Inflation in the non-food articles category came in at 8.43 per cent.
However, the fuel and power basket recorded deflation (negative inflation). Their prices decreased 9.87 per cent in November, according to the data.
"Wholesale prices will continue to see a pickup in the coming months, especially in the manufacturing segment owing to firming up of global metal prices following the opening up of the economy," ratings agency CARE said in a note.
"The recent surge in global crude oil prices will also narrow the deflation in the fuel and petroleum segment. Food prices will come down going ahead as kharif crop enters the market," it added.
Separate data on retail inflation - measured by the Consumer Price Index (CPI) - will be released at 5:30 pm.
The Reserve Bank of India tracks consumer inflation data primarily for formulating its monetary policy. This month, the central bank's Monetary Policy Committee kept the key interest rates unchanged at existing levels, as widely expected, at the end of a scheduled, bi-monthly review.