NEW DELHI (Reuters) – India’s wholesale inflation accelerated in December to 2.37% year-on-year, from 1.89% in November, government data showed on Tuesday, but in line with market expectations.
The wholesale inflation rate, a proxy for producer prices, last month came largely in line with the 2.3% forecast by economists in a Reuters poll.
Food prices rose 8.89% last month, compared with an 8.92% increase in November, with vegetable prices climbing 28.65% year-on-year, marginally up from a 28.57% rise in the previous month. Cereal prices rose 6.82% in December as against a 7.81% rise a month ago.
Prices of manufactured products, which account for about 64% of the wholesale price index, increased 2.14% from a 2% increase in the previous month.
Fuel and power prices in India dropped 3.79% year-on-year, compared with a 5.8% drop in November.
Headline retail inflation, the key target for the Reserve Bank of India’s monetary policy decisions, eased to a four-month low of 5.22% in December, down from 5.48% in the prior month.
The easing rate of retail inflation and a sharp slowdown in India’s growth to a four-year low of 6.4% in 2024-25 has increased pressure on the Reserve Bank of India to cut rates in its next monetary policy committee review due in February.
(Reporting by Nikunj Ohri and Shivangi Acharya; Editing by Sherry Jacob-Phillips)
