Relief in wholesale inflation also came down to three-month low; know full details

There has also been relief from wholesale price-based inflation (WPI Inflation) in November after retail inflation. It has come down to a three-month low. According to the statement of the Ministry of Commerce and Industry, inflation based on Wholesale Price Index (WPI) came down to 1.89 percent in November.

It was at 2.36 percent in October. Whereas, it was at 0.39 percent in November last year. The retail inflation data was released on December 12. The retail inflation rate in November fell to 5.48 percent from 6.21 percent in October.

The prices of food items have come down in November. It was 13.54 percent in October, which came down to 8.63 percent in November. The inflation rate of vegetables fell from 63.04 percent to 28.57 percent. However, the price of potatoes did not come down. Its inflation rate jumped to 82.79 percent.

There was relief in the case of onion and its inflation fell to 2.85 percent. Talking about the oil and power category, deflation continued in them. It stood at 5.83 percent in November as compared to 5.79 percent in October. At the same time, the inflation of manufactured items increased from 1.50 percent to 2 percent.

The retail inflation data came last month (December 12). Retail inflation based on the Consumer Price Index (CPI) fell from 6.21 percent in October to 5.48 percent in November. This decline was also due to the cheapness of food items. Food inflation fell from 10.9 percent to 9 percent in November.

However, the matter of concern for the RBI and the government is that retail inflation remained above 5 months for the third consecutive month. The government has given the RBI a target of keeping the inflation rate within the range of 2 to 4 percent.

The biggest reason for the reduction in wholesale and retail inflation is the fall in the price of food items. Actually, due to monsoon rains, the transportation of vegetables was badly affected in the month before November. Also, there were cases of crop damage due to floods. Inflation is coming down due to better production of Kharif crops in November and increased arrival of vegetables in the market. This trend is expected to continue in the coming months.