Wholesale inflation rises to 0.7% in December

Wholesale inflation in India rose by 0.7% in December 2023, driven by higher food prices. However, most major sub-categories in the Wholesale Price Index (WPI) saw a contraction in prices. The growth in WPI is primarily due to it being higher than the previous year, despite a decline in prices between November and December. The inflation trajectory suggests that input costs remain under control, and the government expects the Reserve Bank of India (RBI) to begin monetary easing from June. Meanwhile, the Consumer Price Index (CPI) inflation increased to 5.7% in December. The cumulative growth in WPI for the first three quarters of 2023-24 still shows a contraction of 1.08%. This could impact the GDP deflator and government fiscal calculations.