India’s wholesale inflation hits 11-mth high
AI Summary
India's wholesale price index-based inflation rose to an 11-month high of 2.13% in February, driven by manufactured goods, primary commodities, and food articles, amid heightened global commodity volatility linked to the Iran war. Shipping disruptions near the Strait of Hormuz are adding supply bottleneck risks for global crude oil, affecting energy and commodity markets. Fuel and power prices remained in deflationary territory despite a modest monthly rebound.
India's wholesale inflation climbed to an 11-month high in February as price pressures from manufactured goods and some primary commodities strengthened, even as fuel prices remained in negative territory, according to data released by the government on Monday, against the backdrop of heightened global commodity volatility triggered by the ongoing Iran war.The Wholesale Price Index (WPI)-based inflation rose to 2.13% in February, up from 1.81% in January and 0.96% in December, signalling a gradual build-up of price pressures across the economy. The positive rate of inflation was primarily due to increase in prices of other manufacturing, manufacture of basic metals, non-food articles, food articles and textiles etc. <iframe src="https://economictimes.indiatimes.com/dynamicchart?tab=WPI&year=1" width="100%" height="520" frameborder="0" scrolling="yes" border="0"></iframe><br /><br />Manufactured products — which carry the largest weight in the WPI basket were the biggest contributor to February’s increase in wholesale inflation.Inflation in this category rose to 2.92% in February, slightly higher than 2.86% in January and 2.03% in December. Food inflation grew to 1.85% in February as compared to 1.41% gain in January.Inflation in primary articles — which include agricultural commodities and minerals — rose sharply on an annual basis to 3.27% in February, up from 2.21% in January and just 0.21% in December.Despite the annual increase, the category actually saw a month-on-month decline of 0.52%.The fall was mainly driven by lower prices of food articles (down 1.33%) and minerals (down 1.21%), though crude petroleum and natural gas prices rose 4.17% and non-food articles increased 0.83% during the month.Fuel and power prices remained a drag on wholesale inflation despite a modest monthly rebound.Inflation in the category stayed negative at –3.78% in February, though the deflation was slightly less severe than –4.01% in January. In December, fuel inflation had stood at –2.31%.On a month-on-month basis, however, the fuel and power index rose 1.17%. Inflation expectations are also being shaped by developments in West Asia, where the conflict involving Iran, Israel and the United States has increased uncertainty around global oil supplies.Shipping disruptions near the Strait of Hormuz, a key passage for global crude shipments, have raised concerns about supply bottlenecks. Nearly one-fifth of global oil trade passes through the waterway.