WPI inflation rises to 2.37% in December; primary articles drop 2.07%, food index eases 2.20% MoM

Key Highlights:

  • The annual rate of inflation based on the all-India Wholesale Price Index (WPI) stood at 2.37% in December 2024, reflecting a moderate increase compared to 1.89% in November 2024.
  • The overall WPI declined marginally by 0.38% month-over-month (MoM), indicating slight deflationary trends in select categories.

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Detailed Insights:

Primary Articles (Weight: 22.62%)

  • The index for primary articles dropped by 2.07% MoM, primarily driven by a 3.08% decline in food articles.
  • Notable movements:
    • Vegetables saw a sharp decline of 13.20% MoM, while fruits decreased by 5.11% MoM.
    • Non-food articles rose 2.53% MoM, supported by gains in minerals.

Fuel and Power (Weight: 13.15%)

  • The index increased by 1.90% MoM, reversing the previous month’s decline.
    • Electricity prices surged by 8.81%, while coal remained largely stable.

Manufactured Products (Weight: 64.23%)

  • The index remained unchanged at 143.0, with mixed movements across categories.
    • Textile manufacturing and fabricated metal products saw modest price increases.
    • Food manufacturing showed a slight decline of 0.34% MoM.

Food Index (Weight: 24.38%)

  • The food index declined by 2.20% MoM, reflecting reduced prices in vegetables and select food products.
    • Potatoes saw a notable decline of 4.60% MoM, while onions dropped by 17.92% MoM.

Year-Over-Year Analysis:

  • Primary Articles: Inflation for December 2024 was recorded at 6.02% YoY, slightly down from 8.26% in October 2024.
  • Fuel and Power: Continued deflationary trends with a 3.79% YoY decrease, though less pronounced compared to November’s 5.83% decline.
  • Manufactured Products: Inflation rose to 2.14% YoY, driven by categories like food products and non-metallic minerals.

Observations:

  1. Vegetables: While annual inflation remains high at 28.65% YoY, the MoM decrease signals easing pressures.
  2. Coal and Electricity: Prices in these sectors drove the upward momentum in the fuel and power category.
  3. Manufactured Goods: A stable trend with minor shifts in subcategories indicates steady industrial activity.

The Ministry of Commerce & Industry continues to monitor these trends, aiming to strike a balance between domestic supply stability and inflation management. The next update on January 2025 figures is scheduled for February 14, 2025.