Wholesale inflation eased to 3.80 per cent in December from 4.64 per cent in the previous month, the government said on Monday. That marked the slowest pace of wholesale inflation recorded in past eight months, helped by a smaller increase in food and fuel prices. December WPI data was also better than a forecast of 4.42 per cent by economists in a poll by news agency Reuters. Wholesale inflation - or the rate of increase in wholesale prices - is determined by Wholesale Price Index (WPI).
Food inflation stood at - or the rate of increase in food prices - was at 0.07 per cent last month, as against a food deflation of 1.96 per cent in November 2018, the Ministry of Commerce and Industry said in a statement. Deflation - or negative inflation - determines the rate of decrease in prices.
Inflation in the 'fuel and power' category, which has a weightage of 13.2 per cent on the Wholesale Price Index, nearly halved to 8.38 per cent in December from 16.28 per cent in the previous month. Inflation in petrol, diesel and LPG (liquefied petroleum gas) stood 1.57 per cent, 8.61 per cent and 6.87 per cent respectively.
The government will release consumer inflation data later in the day. The Reserve Bank of India (RBI) mainly takes into account retail inflation data while formulating its monetary policy.
Separate official data released last Friday showed that growth in industrial production stood at 0.5 per cent in November, the slowest growth rate recorded since June 2017. A contraction in manufacturing activity was a major drag on factory output.
(With agency inputs)