India's Wholesale Inflation Turns Positive in December, Expected to Climb Further
India's wholesale price inflation moved into positive territory during December, marking a notable shift from the previous month's contraction. Official data released by the commerce and industry ministry on Wednesday revealed that inflation, as measured by the wholesale price index (WPI), rose by 0.8% annually in December. This represents a significant increase from the 0.3% deflation recorded in November.
Key Drivers Behind the Inflationary Uptick
The ministry attributed this positive inflation rate primarily to rising prices across several sectors. Notable increases were observed in other manufacturing, minerals, machinery and equipment manufacturing, food products, and textiles. These sectors collectively pushed the overall index higher, signaling a broad-based price pressure.
Barclays highlighted in a research note that the WPI inflation came in higher than anticipated once again. The firm pointed out that narrowing deflation in food articles, coupled with a rise in inflation within manufacturing products, were the main factors driving this increase. This suggests that both primary articles and manufactured goods are contributing to the inflationary trend.
Expert Outlook for the Coming Months
Economic experts are closely monitoring this development and expect the inflation rate to continue its upward trajectory. Many analysts predict that wholesale inflation could cross the 1% mark in the months ahead. This expectation is based on ongoing price adjustments in key commodities and manufacturing inputs, which may sustain the inflationary pressure.
The shift from deflation to inflation in the wholesale sector indicates changing economic dynamics. It reflects adjustments in supply chains, input costs, and demand patterns across various industries. Stakeholders, including policymakers and businesses, will need to watch these trends carefully as they plan for the future.
In summary, December's data shows a clear reversal in wholesale price trends, with inflation now on a rising path. The coming months will likely see further increases, influenced by sector-specific price movements and broader economic factors.
