India’s wholesale price index (WPI) inflation climbed to a four-month high of 2.36% in October 2024, up from 1.84% in September, according to the Ministry of Commerce & Industry’s provisional data. This increase marks the third consecutive month of inflation growth, highlighting rising pressures in various economic sectors. July and August reported lower WPI inflation rates of 2.04% and 1.31%, respectively.

The primary driver of October’s inflation was the spike in food prices, along with higher costs in manufacturing sectors such as food products, machinery, and vehicles. Month-over-month, WPI rose by 0.97% from September to October.

Food-related inflation accelerated dramatically, with food articles up to 13.54% from 11.53% in September. Key contributors included a substantial 63.04% jump in vegetable prices, compared to 48.73% in September, and pulses inflation reaching 9.74%. Potatoes and onions showed staggering inflation rates at 78.73% and 39.25%, respectively.

On the flip side, fuel and power prices continued to contract, easing at -5.79% in October from -4.05% in September, helping moderate logistics and energy-related expenses. Manufactured products inflation held at 1.5%, balancing out some of the pressures from other categories.

Suman Chowdhury, Executive Director and Chief Economist at Acuité Ratings & Research, noted the steady increase in WPI inflation, attributing much of the rise to food costs. “The Food Index is leading with 11.59% year-over-year growth, aligning with retail food inflation,” he said. “This trend has helped offset the impact of fuel price declines, sustaining a stable wholesale inflation environment.”

Looking forward, Chowdhury pointed to a likely easing in food inflation due to the arrival of the kharif harvest and promising rabi sowing conditions. He projected WPI inflation to remain below 3% for the fiscal year, while sticky food prices prompted an upward revision in the forecast for retail inflation to 4.8%. This could delay any rate cuts by the Reserve Bank of India (RBI) into early 2025, as inflation management remains a priority for economic stability.

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