India's October WPI Inflation Rises to 2.36% Due to Higher Food Prices

India's Wholesale Price Index (WPI) inflation climbed to 2.36% in October 2024, driven by rising food costs, according to data from the Ministry of Commerce and Industry. The increase is mainly due to higher vegetable prices, following crop damage from the delayed monsoon retreat.

In September, the WPI inflation rate was at 1.84%, highlighting a notable increase in October. Food prices surged by 13.57% during the month, with vegetables like potatoes and onions experiencing sharp price hikes due to limited supply caused by unfavorable weather.

Manufactured goods, which make up over 64% of the WPI, showed a 1.5% inflation rise. In contrast, fuel and power prices saw a significant decline, with inflation in this sector at a negative 5.79%.

India’s Consumer Price Index (CPI) inflation also rose in October, reaching 6.21%. This was the first time retail inflation exceeded the Reserve Bank of India's (RBI) upper limit of 6%. The increase was similarly driven by soaring food prices, with vegetable costs jumping by 42.18%, affected by the same weather-related crop damages influencing wholesale prices.

The rise in retail inflation has led to speculation on whether the RBI will adjust its monetary policy. The central bank has held interest rates steady for the last 10 meetings but recently adopted a "neutral" stance, moving away from the "withdrawal of accommodation" approach. Although there is talk of a potential interest rate cut, RBI Governor Shaktikanta Das cautioned against it, noting that inflation risks remain significant. He emphasized that cutting rates now could be "very risky."

The RBI aims to bring retail inflation back to 4% before considering any interest rate reductions to encourage economic growth.

Bank of England Cuts Rates to 4.75% Amid Higher Inflation Outlook After New Budget

How Bitcoin's Market Dominance Reached Now Its Highest Level Since 2021