India's wholesale inflation rises to 8-month high of 0.83%
What's the story
India's wholesale price inflation has risen to an 8-month high of 0.83% in December, marking an increase from November's contraction of 0.32%. The rise comes after two months of deflation and is higher than market expectations of a 0.3% increase, government data shows. The surge is mainly attributed to rising prices in manufacturing sectors such as machinery and equipment, food products, textiles, minerals, and other goods.
Inflation trends
Retail inflation also rises in December
Along with wholesale price inflation, retail inflation also witnessed an uptick in December. It rose to a three-month high of about 1.3%, up from November's 0.7%. The rise was due to easing food deflation and increased price pressures on miscellaneous items. However, it is worth noting that this is the fourth consecutive month that retail inflation has remained below the Reserve Bank of India's (RBI) target range of 4%.
Economic outlook
RBI's revised inflation forecast and GDP growth
The RBI's Monetary Policy Committee (MPC) has also revised its inflation forecast for the current fiscal year to an average of 2%, down from the earlier estimate of 2.6%. The MPC has also released new quarterly inflation projections, expecting it to be at 0.6% in Q3, 2.9% in Q4, and rise further to 3.9% and 4.0% in Q1 and Q2 respectively of FY27.