Sample Page Title

Must read




Wholesale Price Index-based Inflation (WPI) for December moderated slightly compared with November, but stayed in double digits for the ninth consecutive month, data released by the Commerce Ministry showed on Friday.


inflation bucked a 4-month rising trend in December 2021 and came in at 13.56 percent, even though food prices hardened. Factory-gate infInflation in November was 14.23 per cent, while in December 2020 it was 1.95 per cent.





“The high rate of inflation in December 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products, textile and paper and paper products etc as compared to the corresponding month of the previous year,” the Commerce Ministry said.


food inflation rose to a 23-month high of 9.56 per cent in December, against 4.88 per cent in November. Vegetable price rise rate jumped to 31.56 per cent, against 3.91 per cent in the previous month.


“The primary food inflation has spiked from the marginal 0.1 percent in October 2021 to an unpleasant 23-month high in December 2021, reflecting the unfavourable base particularly for vegetables. Even as global commodity prices corrected on account of the impact of Omicron, domestic producers undertook price increases in various sectors to protect margins against the cumulative impact of the rise in input costs,” said Aditi Nayar, Chief Economist with ICRA Ltd.


“Notwithstanding the continued double-digit inflation in December 2021, we expect the MPC to pause in February 2022. Once normalisation commences, we subsequently expect two repo rate hikes of 25 bps each, followed by a pause to reassess the durability of growth,” Nayar said.


The Reserve Bank of India (RBI) is slated to announce its monetary policy on February 9.


Sunil Kumar Sinha, Principal Economist with India Ratings, said that part of the reason for the rise in fruits & vegetables inflation is supply disruption caused by excess rains in the southern parts of the country. In addition, cereals inflation rose to 5.1 percent in December, a 22-month high. Edible oils inflation despite some easing is at elevated levels of 16.84%, Sinha said.


“Fuel prices in the international markets somewhat softened due to the concerns over the spread of Omicron but Brent crude at $74.22/barrel in December 2021 is still keeping the fuel cost in the India market high,” Sinha said.


Sinha said that going forward, fuel prices are expected to stay at the elevated levels. “Flare up in COVID cases due to the Omicron variant will jeopardise the normalisation of global supply chains with an upward pressure on transportation and distribution costs. Against this backdrop, we expect the wholesale inflation to be in double-digits in rest of the fiscal,” he said

Trendy Voice Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link

close
Trendy Voice

Hi!
It’s nice to meet you.

Sign up to receive awesome content in your inbox, every week.

We don’t spam! Read our privacy policy for more info.

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article