WPI inflation dips to 3.39% in Oct as food prices soften

Wholesale Price Index-based inflation eased to 3.39 per cent in October from 3.57 per cent in September as food items became cheaper.

“The index food articles group declined by 0.3 per cent to due to lower price of urad, masur and fruits and vegetables, arhar, bajra, maize and mutton, jowar and moong, fish-inland and condiments and spices,” according to official data released on Tuesday.

WPI inflation stood at 3.7 per cent in October 2015.

PTI adds: Wholesale Price Index (WPI) inflation in vegetables witnessed deflationary pressures and was recorded at (—)9.97 per cent in October. Inflation in this category had scaled a high of 28.45 per cent in July. This was aided by inflation data for onion, which was at (—)65.97 per cent.

Pulses inflation continued to rule high at 21.80 per cent in October, according to the Commerce Ministry data.

Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 60.58 per cent. Inflation in fruits rose 6.45 per cent during the month.

Overall, the food inflation basket showed moderation with inflation at 4.34 per cent in October, as against 5.75 per cent in September.

The inflation print for manufactured articles read at 2.67 per cent in October compared to 2.48 per cent in the previous month.

The rate of inflation in sugar was at 29.63 per cent and that for petrol was 3.57 per cent.

WPI inflation for August has been revised upwards to 3.85 per cent against a provisional estimate of 3.74 per cent.

Data for October retail inflation is expected later in the day.

The all-powerful Monetary Policy Committee headed by RBI Governor Urjit Patel last month cut benchmark interest rates by 0.25 per cent to 6.25 per cent.

While he had signalled more tolerance towards inflation, the easing in CPI data was in line with the RBI’s forecast for an average 5 per cent inflation in the fourth quarter of 2016. This, many expect, would create more room for interest rate cuts.

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