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WPI inflation eases to 2.31% in Jan, from 2.37% in Dec on food prices

2025-02-14 00:00:00.0 商业标准报-经济和政策原网页

India’s wholesale price index (WPI) inflation eased to 2.31 per cent in January 2025, down from 2.37 per cent in December 2024, according to data released by the Ministry of Commerce and Industry on Friday. Even as food article prices declined, the ministry noted rising costs in the manufacturing of food products and textiles.

In January 2024, WPI inflation stood at 0.27 per cent.

The WPI Food Index fell to 7.47 per cent in January 2025, compared to 8.89 per cent in December 2024, suggesting a slight easing in food price pressures.

Fuel prices declined by 2.78 per cent in January, compared to a 3.79 per cent drop in December. Meanwhile, manufacturing inflation rose to 2.51 per cent, up from 2.14 per cent in the previous month.

The cost of food articles saw a decline of 3.62 per cent on a month-on-month basis, but prices of crude petroleum & natural gas (6.34 per cent), non-food articles (0.66 per cent), and minerals (0.22 per cent) registered an increase.

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Mineral oil prices went up by 0.71 per cent, while electricity became 0.20 per cent costlier in January. Meanwhile, coal prices remained stable.

WPI inflation fell below ICRA estimates of 3.1 per cent. Commenting on this, ICRA Senior Economist Rahul Agrawal said, "The surprise was largely driven by the lower-than-anticipated prints for the food and core items... Given these trends, ICRA expects the WPI-food inflation to ease further to sub-7.0 per cent in February 2025 from 7.5 per cent in January 2025."

"After rising sharply in January 2025, global commodity prices have inched up further in February 2025 so far (up to February 13, 2025), amid growing uncertainty around the impact of the US protectionist trade policies. This would exert an upward pressure on the WPI non-food component. Besides, the USD/INR pair has depreciated, averaging at 87.19/$ during February 1-13, 2025 against 86.25/$ in January 2025, which would likely push up the landed cost of imports in the ongoing month," Agrawal explained.

"Overall, we project the WPI to average at ~2.4 per cent per cent in FY25 and inch up further to ~3.0 per cent in FY26, despite expectations of a cooling in the prints for the food segment. A continued depreciation in the USD/INR pair and tariff-related rise in global commodity prices would pose upside risks to our estimates," he concluded.

Retail inflation eases to five-month low in Jan

India's consumer price index (CPI)-based retail inflation eased to a five-month low of 4.31 per cent in January, down from 5.22 per cent in December. This decline, driven primarily by easing food prices, has fueled expectations that the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) may implement another repo rate cut in its upcoming meeting in April.

Retail inflation dips to 5-month low in Jan; IIP slows to 3.21% in Dec

Year-on-year food inflation moderated to 6.02 per cent in January, compared to 8.39 per cent in December. The decrease was largely attributed to falling vegetable prices, which had previously kept food inflation elevated. Vegetable prices saw a notable decline, from 26.6 per cent in December to just 11.35 per cent in January.

Industrial production slows in Dec

Despite the positive inflation data, industrial production growth showed signs of slowing down. The Index of Industrial Production (IIP) grew by just 3.21 per cent in December, marking a four-month low, down from 4.96 per cent in November. This deceleration in growth was primarily due to a slowdown in the manufacturing sector.