New Delhi: Deflationary trend continued for the 12th month in a row with WPI inflation at (-)3.81 percent in October, mainly on account of subdued prices of food items although pulses and onion turned costlier.
Inflation based on Wholesale Price Index has been in the negative zone since November last year. It was (-)4.54 percent in September. In October last year, it was 1.66 percent.
Pulses and Onion among the food items category turned costlier with inflation at 52.98 percent and 85.66 percent respectively during October.
Despite the sharp rise in prices of various pulses and the concerns generated by the unfavourable monsoon, overall food inflation remained muted in October, ICRA Senior Economist Aditi Nayar said.
The rate of price rise in case of vegetables was at 2.56 percent as against (-)19.37 percent in the same month last year, as per official data released today.
Besides pulses and onion, the food items which became dearer in October were milk (1.75 percent) and wheat (4.68 percent). However, inflation rate in case of potato was in the negative zone, (-)58.95 percent.
Inflation rate in fuel and power segment was (-)16.32 percent, while that in manufactured products was (-)1.67 percent in October.
The Reserve Bank would take into account WPI number for October while deciding on the key interest rate in its December 1 monetary policy review.
Most of the analysts feel that RBI is unlikely to cut the rate in its upercentoming policy review.
RBI mostly tracks the Consumer Price Index-based retail inflation for its monetary policy decisions.
Rising for the third straight month, retail inflation has climbed to 5 percent in October, as against 4.62 percent in the same month a year ago due to costlier pulses and other food items.
Industry bodies said inflation may go up in the coming
month due to rise in fuel prices and its impact on manufacturing.
Further excise tax hike on petrol and diesel and cess imposition on services put together are likely to put an upward pressure on the November WPI, Assocham said.
CII said however that inflation is likely to remain muted as commodity prices remain under pressure in the international market.
Assocham also said that action of global capital markets or emerging markets to the Fed hike will play a role in the upercentoming RBI bi-monthly monetary policy.
RBI Governor Raghuram Rajan had said earlier this month that the central bank is comfortable with the current rate of interest till further room is available.
In September, RBI had reduced interest rates by more than expected 0.50 percent and said it expects CPI inflation to reach 5.8 percent in January 2016.
As per the official data, inflation for food articles group rose by 0.3 percent on month-on-month basis due to higher price of urad (17 percent), arhar (12 percent), gram (7 percent), moong (6 percent), barley (3 percent), jowar, masur, pork and condiments & spices (2 percent each) and wheat, tea and bajra (1 percent each).
However, the price of poultry chicken declined by 8 percent), beef & buffalo meat and fish-marine (4 percent each), maize (2 percent) and coffee and fish-inland (1 percent each).
Inflation for August has been revised to (-)5.06 percent, from the provisional estimate of (-)4.95 percent.
