New Delhi, November 10 (Reuters): India’s annual wholesale price-based inflation, a proxy of producers’ prices, accelerated in October to a five-month high, pushed up by increases in fuel and manufacturing prices, fuelling concerns of rising inflationary pressures for firms.
The gap between retail and wholesale price-based inflation has widened in recent months as many companies and retailers are still trying to absorb galloping input costs that threaten to hit their bottom lines.
Annual wholesale price-based inflation (INWPI=ECI) in October rose to 12.54% from the previous month’s 10.66%, remaining in double-digits for the seventh month in a row, government data showed on Monday.
Consumer prices based inflation, the main gauge monitored by the monetary policy committee of Reserve Bank of India, rose 4.48% in October from the same month last year, speeding up from September’s 4.35%, separate data released on Friday showed.
Economists said the recent cut in fuel tax rates by the government could lower pressures on households and companies in the short-term, but firms are trying to pass on rising costs as domestic demand picks up.
In the April-June quarter, the economy grew an annual 20.1%, and the central bank expects GDP to expand 9.5% in the current fiscal year ending in March 2022.
Wholesale fuel and power prices rose 37.18% in October year-on-year compared with 24.81% in September, while manufactured product prices rose 12.04% compared with 11.41% in the previous month, data showed.
Wholesale prices of food accelerated at a 3.06% pace in October from a year earlier compared with 1.14% in the previous month.
The RBI’s monetary policy committee is scheduled to meet Dec. 6-8 and is widely expected to leave the repo rate unchanged at 4%.
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