India’s wholesale inflation (WPI) showed signs of recovery in November, edging up to -0.32 percent from -1.21 percent in October, indicating a gradual easing of deflationary pressures across the economy.
The improvement marks a rebound from October’s 12-month low in the Wholesale Price Index, suggesting that the worst phase of wholesale price deflation may be behind us, even though inflation remains in negative territory.
What Drove Wholesale Inflation Higher in November?
The uptick in WPI was largely driven by a slower pace of decline in primary articles, especially food items, after months of sharp price corrections. As price pressures stabilised across select commodities, the overall contraction in wholesale prices narrowed.
Food Prices Still a Drag, but Decline Softens
Food inflation continued to exert the largest downward pressure on wholesale inflation in November. However, the rate of decline moderated, offering some relief:
- The food index remained in contraction, but the fall was less severe
- Vegetable prices stabilised after earlier sharp declines
- Reduced volatility in key food items helped support the WPI print
Key Takeaway
While India’s wholesale inflation remains negative, the November data points to easing deflationary trends and improving price stability. This could provide comfort to policymakers and markets, especially as attention shifts to how wholesale trends may eventually feed into retail inflation and monetary policy decisions.
For investors and economists, November’s WPI data strengthens the case that deflationary pressures in commodities are gradually bottoming out.
