India's wholesale prices accelerated to a nine-month high in December, led by the base effect.
The Wholesale Price Index rose 0.73% during the month, compared to 0.26% in November, according to data released by the Ministry of Commerce and Industry on Monday.
The gauge fell by 0.85% over the previous month.
Retail inflation stood at 5.69% in December, compared with 5.55% in November, rising to the highest in four months, according to data published on Friday.
While the slight annualised uptick is on account of the base factor, the sequential contraction was seasonally driven, due to the softness in food articles, said Suman Chowdhury, chief economist and head of research at Acuité Ratings & Research Ltd.
The wholesale inflation for manufactured goods persisted in the contractionary zone for the tenth straight month, along with continuing deflation in fuel and power. This indicates that input costs remain favourable for the industrial segment in the absence of a strong global demand, said Chowdhury. In the near term, the deflationary trend in manufactured goods is likely to remain.
WPI inflation print is expected to be shaped by the trend in the food category and in the absence of any major surprises, it should remain range bound between 0-1.0%, according to Chowdhury.
WPI Inflation Internals (Year-On-Year)
Inflation in manufactured products—the largest component of the index—was -0.71%, compared with -0.64% in November.
Primary-article inflation was 5.78%, against 4.76% in the previous month.
Inflation in food articles rose 9.38%, compared to 8.18% in the previous month.
Vegetable inflation rose 26.3%, compared with a rise of 10.44% in the preceding month.
Inflation in non-food articles was at -4.73%, against -3.2% in the previous month.
Fuel and power inflation stood at -2.41%, compared with -4.61% in December.
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