Inflation, as measured by the Wholesale Price Index (WPI), was 12.96% in January 2022 against 13.56% in December 2021.
“The high rate of inflation in January, 2022 is primarily due to rise in prices of mineral oils, crude petroleum & natural gas, basic metals, chemicals and chemical products, food articles etc as compared the corresponding month of the previous year,” commerce and industry ministry said in a statement.
Month-on-month, the WPI rose 0.35%.
Inflation in manufactured products was 9.42% versus 10.62% in December while in food articles was 10.33% as against 9.56% in the previous month. Fuel and power inflation stood at 32.27% against 32.3% in December.
“Discomfitingly, primary food and non food articles, and minerals, recorded a pickup in the YoY inflation in January 2022 relative to December 2021,” said ICRA chief economist Aditi Nayar.
Prices of minerals rose 11.08% and non-food articles grew 0.37% in January, 2022 as compared to December, 2021, according to the government.
Vegetables inflation was 38.45% compared to 31.56% in December.
Nayar said that after a gap of eight months, core-WPI inflation cooled back into single digits, benefitting from a favourable base.
“We expect the core-WPI inflation to continue to inch downwards over the next few months,” she said.
The continuous hardening in crude oil prices exacerbated by the ongoing geo-political concerns, and its impact on the Indian Rupee poses the biggest risk to the WPI inflation trajectory in the ongoing quarter.
ICRA expects the WPI inflation to print between 10.5-12% in the next two months, with the hardening in crude oil prices and its eventual transmission into retail fuel prices.
