Even as the fuel prices moved up, the annual wholesale price inflation eased in December following softening of prices of food articles such as furits and vegetables. The inflation, based on monthly WPI, stood at 3.58 per cent for the month of December 2017. WPI Inflation stood at 3.93 per cent for the month of November and 2.10 per cent during the corresponding month of the previous year.
According to the data released by the Ministry of Commerce & Industry, inflation in food articles slowed to 4.72 per cent in December from 6.06 per cent in November. The index for 'Food Articles' group declined by 4.3 percent to 144.1 (provisional) from 150.6 for the previous month due to lower price of fruits and vegetables.
Earlier, retail inflation for December had risen to a 17-month high to 5.21 per cent as compared to 4.88 per cent recorded in November.
Vegetables too witnessed some softening with annual inflation at 56.46 per cent in December as against 59.80 per cent in the previous month. Kitchen staple onion witnessed a whopping 197.05 per cent price rise in December.
Inflation in protein rich eggs, meat and fish cooled to 1.67 per cent in December, while that in fruits spiked to 11.99 per cent.
In the fuel and power segment, wholesale inflation rose to 9.16 per cent in December, while it was 2.61 per cent for manufactured items.
Data released last week showed that retail inflation breached the RBI's comfort level to touch 5.21 per cent in December on rise in prices of food items, especially vegetables.
The Reserve Bank takes into account retail inflation while deciding on key policy rates.
In its last policy review in December, the RBI had kept key interest rate unchanged. It raised inflation forecast for remainder of the current financial year to 4.3-4.7 per cent, on account of global crude oil prices and implementation of the 7th Pay Commission recommendations.
Meanwhile, inflation for October has been revised upwards to 3.68 per cent from the provisional estimate of 3.59 per cent released earlier.
with PTI inputs