WPI inflation rises to two-month high of 5.13% in September on hardening of food prices, increase in fuel cost

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WPI inflation rises to two-month high of 5.13% in September on hardening of food prices, increase in fuel cost

New Delhi: Inflation based on wholesale prices rose to a two-month high of 5.13 percent in September, mainly due to hardening of food prices and rise in cost of petrol and diesel.

The Wholesale Price Index (WPI) based inflation stood at 4.53 percent in August and 3.14 percent in September last year.

According to the government data released Monday, food articles witnessed hardening of prices with deflation at 0.21 percent September as against 4.04 percent in August.

Deflation in vegetables was 3.83 percent in September, compared to 20.18 percent in the previous month.

Inflation in ‘fuel and power’ basket in September was 16.65 percent. Individually, in petrol and diesel it was 17.21 percent and 22.18 percent, respectively, and for LPG it was 33.51 percent.

Among food articles, potato inflation spiked to 80.13 percent in September, while onion and fruits witnessed deflation of 25.23 percent and 7.35 percent, respectively. Deflation in pulses stood at 18.14 percent.

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The 5.13 percent inflation is the highest in two months, and a higher inflation than this level was last seen in July at 5.27 percent.

Data released last week showed retail inflation rose to 3.77 percent in September from 3.69 percent in the previous month. The RBI mainly takes into account retail inflation data while formulating monetary policy.

In its fourth monetary policy review for the fiscal last week, the Reserve Bank maintained status quo on the benchmark interest rate but warned that volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation.

For October-March, the RBI pegged CPI-based retail inflation to be between 3.9-4.5 percent.