Informist Poll
Low base may push Jan WPI inflation to 3-month high of 2.6%
This story was originally published at 15:38 IST on 11 February 2025
Register to read our real-time news.Informist, Tuesday, Feb. 11, 2025
By Shubham Rana
NEW DELHI – India's wholesale inflation is expected to have risen to a three-month high of 2.6% in January, according to an Informist poll of 10 economists, driven by a low base, although food prices continued to cool. In December, a similar dynamic had seen WPI inflation increase to 2.37%. The Ministry of Commerce and Industry will release WPI data for January at 1200 IST on Friday.
In January 2024, the all-commodities index of the WPI had declined 0.4% from December 2023, resulting in an unfavourable base effect for the first month of 2025. The median of economists' forecasts for last month indicate the all-commodities index would have declined 0.2% on month in January.
Base effect aside, wholesale price momentum is likely to have eased in January because of a fall in prices of vegetables and pulses. According to data from the Department of Consumer Affairs, wholesale prices of tomato, onion, and potato declined 37.7%, 22.8%, and 17.9%, respectively, in January compared to the previous month. Prices of pulses and rice also declined sequentially in January. According to Teresa John, economist at Nirmal Bang Institutional Equities, food articles inflation is seen moderating to 7.3% in January from 8.5% in December.
While wholesale food inflation may have moderated, core WPI inflation is expected to have picked up pace in January because of a low base, John noted. Core WPI inflation--or inflation excluding food and fuel items--was 0.7% in December, having steadily risen after entering positive territory in May last year.
Wholesale inflation for manufactured products, which account for over 64% of the WPI, rose to a 23-month high of 2.14% in December. However, S&P Global's manufacturing Purchasing Mangers' Index survey from earlier this month showed input cost inflation in January was the lowest since February 2024.
While WPI inflation is seen rising in January, its retail counterpart is estimated to have eased to a five-month low of 4.5% during the month, data for which will be released at 1600 IST on Wednesday. The Reserve Bank of India, which last week cut the repo rate for the first time in almost five years, expects CPI inflation to average 4.4% in Jan-Mar and 4.2% in 2025-26 (Apr-Mar).
The following is a summary of the poll by Informist on WPI inflation in January:
|
ORGANISATION |
WPI INFLATION ESTIMATE |
|
Acuite Ratings and Research |
2.30% |
|
Bank of Baroda |
2.35% |
|
Nomura |
2.5% |
|
Sunidhi Securities |
2.5% |
|
Capital Economics |
2.6% |
|
CareEdge Ratings |
2.6% |
|
Nirmal Bang Institutional Equities |
2.66% |
|
India Ratings and Research |
2.8% |
|
STCI Primary Dealer |
2.9% |
|
ICRA |
3.1% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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