Inflation Surge: December's Wholesale Price Index Rises

Wholesale price inflation increased to 2.37% in December 2024 due to rising costs of non-food articles, manufactured goods, and fuel despite food prices easing slightly. Inflation in vegetables remained high. ICRA projects further increases in WPI due to rising crude oil prices and currency depreciation.

In December 2024, wholesale price inflation climbed to 2.37% as non-food articles, manufactured items, and fuel recorded significant price hikes, according to government data released on Tuesday. While food items experienced marginal price relief, vegetable inflation persisted at an elevated level.

The Wholesale Price Index (WPI) indicated a rise from 1.89% in November 2024 and 0.86% in December 2023. Senior Economist Rahul Agrawal of ICRA attributed the WPI increase largely to the fuel, power, and non-food articles categories.

Projections suggest further inflationary pressures in January 2025, driven by growing global crude prices and the depreciating USD/INR exchange rate. ICRA anticipates the WPI could average 2.5% for the fiscal year, potentially rising to 3-3.3% in FY26.

(With inputs from agencies.)