WPI inflation declines to 3-month low of 1.89% in Nov

Barclays expects MPC to cut the policy repo rate by 25 basis points in its February meeting

- Dhirendra Kumar

The annual inflation rate based on the all-India Wholesale Price Index (WPI) eased to 1.89% in November, down from 2.36% in October, driven by lower food prices.

This marks a significant shift from the same period a year ago when WPI inflation was 5.85%.

According to data from the ministry of commerce and industry, the decline in WPI inflation was primarily driven by a sharp drop in the prices of key commodities such as petroleum products, food and manufactured goods.

WPI, a proxy for producers' prices, has been positive since November 2023.

To be sure, the fact that the inflation rate remained in positive territory in November was primarily because of high prices in the food and manufacturing sectors.

Food prices declined to 8.63% in November from 13.54% in October, according to data released by the ministry of commerce and industry.

The decline was helped by a fall in vegetable prices, which stood at 28.57% as against 63.04% in October.