This is the seventh consecutive month in which wholesale inflation has stayed in double digits. It was 10.66% the previous month and 1.31% in October 2020.
Retail inflation, tracked by the RBI, accelerated to 4.48% in October from 4.35% in September, according to data released last week.
“Broad-based input price pressures amid a depreciating Indian rupee, as well as a spike in vegetable and electricity prices, pushed the WPI (Wholesale Price Index) inflation to a higher-than-expected five-month high of 12.5% in October 2021, with the core inflation rising to a fresh all-time high of 11.9%,” said Aditi Nayar, chief economist at ratings firm ICRA.
Wholesale fuel and power inflation accelerated to 37.18% in October from 24.81% a month earlier, while core inflation moved up to an all-time high of 11.9% and manufacturing inflation came in at 12%.
“As supply disruption has yet to normalise in many areas and manufacturers are becoming more confident about the demand recovery, they are increasingly passing on the higher input costs to their output prices,” said Sunil K Sinha, principal economist, India Ratings & Research.
Since fuel is a major input into transportation cost, higher fuel prices can push up the distribution cost further, Sinha said. According to ICRA, the 19% spike in the electricity sub-index is partly reflecting the issues related to coal availability and has pushed up the overall fuel inflation to 37%.
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