Wholesale price based inflation rises to 3.93 per cent in Nov

The rise compares with a 3.78 per cent increase forecast by economists

The rise compares with a 3.78 per cent increase forecast by economists

The wholesale price index-based inflation jumped to 3.93% in November 2017 due to a sharp rise in onion pricesand costlier seasonal vegetables.

In terms of food prices, the YoY (Year-on-Year) wholesale inflation rate for onions was higher by 178.19 per cent, whereas for potatoes it plunged by (-) 40.73 per cent.

The WPI inflation of food articles increased 6.06 per cent last month, against 4.30 per cent in October, while that of LPG rose by 31.3 per cent in November, against 26.53 per cent in the previous month.

The index for primary articles (weight 22.62 per cent) rose by 1.6 per cent to 135.6 from 133.4 for the previous month.

Retail inflation, based on the Consumer Price Index, hit a 15-month high of 4.88 per cent in November, according to data released earlier this week.

Passenger vehicle sales rose by 14.29 per cent in November mainly due to a low base during the same month a year ago on account of demonetisation.

On a monthly basis, wholesale prices went up 0.7 percent in November.

Prices of the other major group under the WPI, manufactured products, which comprise almost 64.23 per cent of the index, recorded a 2.61 per cent rise.

The industry body stated that since rise in WPI numbers may have a corresponding upward impact on CPI, which may limit the possibility of a rate cut by RBI, which has already shown concern for the increase in inflation in the future.

The RBI has raised its inflation projection to between 4.3 per cent and 4.7 per cent for the six months ending in March 2018.

Protein-rich eggs, meat and fish as a category, however, grew at a slower pace of 4.73% during the month, against 5.76% in preceding month.

Similarly, fuel and power prices accelerated by 8.82 per cent.

"Upside risks to WPI inflation are form lower rabi crop and increase in crude oil prices due to efforts by OPEC member countries to curb oil production", said CARE Ratings.

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