Wholesale inflation eases to 8.39%, consumers may not benefit

India's wholesale price inflation (WPI) in October fell to a 20-month low 8.39 per cent year-on-year, since March 2021.

It was also less compared to 10.70 per cent in September, mainly due to a slide in commodity prices.

This was also the first time that the WPI fell below a double-digit mark in 18 months.

The WPI had soared to 15.88 per cent in May 2022. In October 2021, it was 13.83 per cent.

"Decline in the rate of inflation in October 2022 is primarily contributed by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment, textiles, other non-metallic mineral products minerals etc," an official statement said.

Inflation in primary articles was 11.04 per cent, while food articles inflation rose to 8.33 per cent from 0.06 per cent in October 2021.

Reacting to the numbers Rajani Sinha, Chief Economist, CARE Ratings said: "In line with our expectations, WPI inflation fell to single digit in October after a gap of 18 months. The easing of WPI inflation was aided by softer global commodity prices and a favourable base."

She said, with significant correction in prices of fuel, metals and chemicals in the past five months, WPI inflation has been on a downward trend.

"Imported inflation due to weaker rupee and high food inflation (for items like cereals and vegetables) will continue to put some upward pressure on WPI inflation. Nevertheless, we expect the wholesale inflation to ease further and scale below the CPI inflation by the fourth quarter of FY23," Sinha added.

The pace of moderation in inflation at the retail level could be relatively muted as producers may not fully pass on the benefits of easing commodity prices to the final consumers, she added.