Wholesale Price Index (WPI) inflation has risen to 2.59 per cent in December from 0.58% in November. This is the highest inflation figure in last eight months. WPI inflation had touched 3.1% in April 2019. WPI inflation had stood at 3.46 per cent in December 2018. According to data released by the Ministry of Commerce and Industry on Tuesday, inflation of food articles increased to 13.24 percent from 11 per cent in November.
Onions, which saw prices peak in December, observed an inflation rate of 455.8 per cent against 172.3 per cent in November. Overall vegetables inflation spiked from 45.32 per cent in November to 69.69 per cent in December.
As for non-food articles, prices spiked four-fold to 7.72 per cent from 1.93 per cent in November.
Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services said, "Since the beginning of FY20, wholesale based inflation has been in a downtrend. However, in Dec WPI surged to 2.59% from 0.58% in Nov, as onion prices have been jumping since late Sep. The index may rally further if the rise in prices of food components continue the uptrend. WPI along with retail inflation (7.35%) may stop RBI-MPC from cutting repo rate in Feb despite subdued growth and maintain an accommodative stance."
The consumer price index based retail inflation, as per data released on Monday, spiked to over a 5-year high of 7.35 per cent in December due to costlier food products.