Wholesale inflation worsens to 2.36% in October

Domestic wholesale inflation worsened to 2.36 per cent in October from 1.84 per cent in the previous month thanks to rising food prices, according to official data released on Thursday. Gauged by the Wholesale Price Index (WPI), wholesale inflation—also known as headline inflation—is the rate of increase in the prices of select goods and services in the country. 

Food inflation—captured in the WPI Food index—entered double digits, recorded at 11.59 per cent in October versus 9.47 per cent in September, the data showed. 

The WPI Food index has a weightage of 24.38 per cent in the overall Wholesale Price Index. The food index contains 'food articles' from the primary articles group and 'food products' from the manufactured products group.

The wholesale inflation reading comes days after separate data showed retail inflation—or consumer inflation—exceeded the crucial 6.0 per cent mark in the country in the same month. Consumer inflation stood at 6.21 per cent in October, beyond the Reserve Bank of India's comfort zone of 2-6 per cent.

What caused Wholesale Price Index-based inflation to worsen sequentially?

Wholesale inflation in October was primarily fueled by a jump in the prices of food articles, manufacturing of food and other products including machinery, equipment, motor vehicles and trailers, according to the Ministry of Commerce & Industry. 

Wholesale Inflation vs Consumer Inflation 

The RBI tracks consumer inflation primarily to formulate its monetary policy. The central bank's Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, is scheduled to conduct its next bi-monthly review in December, after it decided to switch to a 'neutral' policy stance, from 'withdrawal of accommodation', while maintaining a status quo on benchmark lending rates.

ALSO READ: Consumer inflation worsens to 6.21% in October from 5.49% in previous month

Official data capturing wholesale inflation trends of the current month will be released on December 16. 

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