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India’s wholesale inflation hits eight-month high, rises 0.26% in November

India’s wholesale inflation jumped to 0.26 percent in November after breaking out of negative territory for the first time since March 2023, according to data issued by the Commerce Ministry on December 14.

In October 2023, the Wholesale Price Index (WPI) showed a rate of -0.52%, while in November 2022, it was 6.12%. At 0.26 percent in November, the wholesale inflation rate reached its highest level in eight months.

The price increases of food items, minerals, machinery and equipment, computers, electronics and optical products, motor vehicles, other equipment, and other manufacturing caused inflation to increase by 0.26 percent in November compared to the same month last year.

The annual rate of inflation based on all India Wholesale Price Index (WPI) number is 0.26% (Provisional) for November, 2023: Ministry of Commerce & Industry pic.twitter.com/oW3Oajn2DL
— ANI (@ANI) December 14, 2023

Retail inflation rate decreased in the country in December, inflation rate was 5.72 percent

The nation’s retail inflation rate has once more decreased. Following November, this inflation rate also decreased in December 2022. The retail inflation rate was 5.72 percent in December, down from 5.88 percent in November, according to the figures issued today.

The fact that this rate is the lowest in the previous 12 months is notable. It is important to note that the retail inflation rate has decreased, mostly as a result of a lowering of food costs.

Urban regions had a decrease in the CPI (Consumer Price Index) inflation rate from 5.68 percent in November to 5.39 percent in December. As a result, the CPI in rural regions dropped from 6.09 percent in November to 6.05 percent in December.

Inflation was a hot political topic in 2022 because it was increasing and the price of goods was rising. The RBI has been attempting to keep inflation under control for the past few quarters.

Inflation has come down since two months, hope of getting relief from rising home loan and EMI

The inflation rate in India has been falling over the past two months. The cycle of policy rate increases is set to come to a stop as November’s retail inflation rate dropped to 5.88%. In research released on Monday, economists from SBI, the largest bank in the nation, provided this information.

The RBI is in charge of controlling inflation between 2 and 6 percent. According to economists, the retail inflation data for November is positive for putting a halt to the cycle of policy rate increases.

The RBI‘s strong monetary policy approach, according to the research, might aid in bringing domestic inflation under control. It has been said that the Federal Reserve, America’s central bank, may need to raise the policy rate until the country’s inflation is under control. This will result in more capital leaving emerging markets. The currency rate will fluctuate, and the value of the rupee will decrease.

However, according to experts, between December 2022 and January 2023, the headline inflation rate might increase once again to 6.5 to 6.7 percent. While it is anticipated to drop further to 5% by March 2023.

Repo rate increased 5 times

To combat inflation, the central bank has raised the policy rate repo by 2.25 percent five times since May. In its monetary policy review from last week, the Reserve Bank forecast that inflation would fall to 6% in the quarter between January and March.

Big relief to the general public due to wholesale inflation, retail inflation reached a low of 3 months

Soon, common folks who have been struggling with inflation for the past few months will get some comfort. This is due to the fact that the government’s Monday release of wholesale inflation data showed a decrease in inflation of 8.39 percent for the fifth consecutive month. Wholesale inflation was 10.70% earlier in September. In August, it was 12.41% at the same hour.

The wholesale inflation rate is at its lowest level in 19 months. Wholesale inflation was 7.89% earlier in March 2021. As a result, the country’s core sector’s inflation rate has decreased to 4.6%. In September, it was close to 7%.

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Inflation falls to single digits; the Annual rate of inflation based on all India Wholesale Price Index (WPI) number is 8.39% for the month of October 2022 as against 10.70% recorded in September 2022: Ministry of Commerce & Industry
— ANI (@ANI) November 14, 2022

Inflation reduced on these items

Monthly food inflation decreased from 11.03 percent in September to 8.33 percent in October. Vegetable inflation has decreased from 39.66% in September to 17.61% today. From 49.79% in September to 44.97% in October, there has been a decrease in potato inflation. From -20.96% the previous month, onion inflation has decreased to -30.02% this month.

Inflation is still above RBI’s target

Despite the decrease, the inflation rate continues to be above the Reserve Bank of India’s cap. A 2 to 6 percent inflation rate is the target set by the RBI. The rate of retail inflation has stayed over the desirable ceiling of 6% since January of this year.

Shock to the public before Diwali, loans will become expensive, RBI hikes repo rate

The repo rate has been raised by 50 basis points by the Reserve Bank of India (RBI). Your EMI will likewise increase in price as a result. The current repo rate is 5.90%, up from 5.40%, while the SDF rate is 5.65%, up from 5.15%. Five of the six MPC members supported raising the rates. According to the RBI, all sectors continue to be concerned about inflation. Earlier, the interest rate was raised by a number of significant central banks throughout the world, including the US Federal Reserve.

RBI Governor Shaktikanta Das announces that RBI "increases the policy repo rate by 50 basis points to 5.9% with immediate effect." pic.twitter.com/YpDjOVsgus
— ANI (@ANI) September 30, 2022

Repo rate increased by 1.90 percent since May

The RBI had previously indicated raising the repo rate by 0.50-0.50 percent twice in June and August based on the MPC’s recommendations. The central bank abruptly raised the interest rate by 0.40 percent earlier in May. This indicates that since May, the repo rate has grown by 1.90 percent.

Future loans will be more expensive

The cost of borrowing will rise if the repo rate rises. Loans will grow more expensive in the future if banks find money to be pricey. Customers will feel the effects through banks. The sale of homes is anticipated to rise further as a result.

Big success for India, overtakes Britain to become the 5th largest economy in the world

The economy of India has been prosperous in recent years. The Indian economy now ranks fifth in the world ahead of Britain’s. Britain has dropped to sixth place from fifth. Due to the rising cost of living, the UK is currently experiencing hardship. Its drop to sixth place in such a scenario represents a significant setback for the local government. In the latter three months of 2021, India, formerly a British colony, passed Britain to become the fifth-largest economy in the world.

The US dollar is used as the base currency for the calculation. In addition, based on GDP estimates, India’s growth in the first quarter was reinforced, according to data from the International Monetary Fund (IMF).

Britain drops behind India to become the world's sixth largest economy

The former British colony jumped past the UK in the final three months of 2021 to become the fifth-biggest economy ⬇️ https://t.co/HT2xeFoIbr
— Bloomberg UK (@BloombergUK) September 2, 2022

Britain suffers a big blow

The new government in Britain will suffer greatly as a result of the economic decline there. There will soon be a vote among Conservative Party members to choose the Prime Minister of Britain. In such a scenario, the next government’s primary obstacles will be inflation and a weak economy. The Indian economy, however, is predicted to grow at a rate of over 7% this year.

Despite challenges, it moves fast

If we compare the economies of India and Britain in terms of dollars, India’s economy was $ 854.7 billion in the March quarter, according to IMF figures. The UK economy was worth $816 billion at the time. The data indicate that, despite the effects of recession and inflation, which are causing economic problems worldwide, the Indian economy is nevertheless growing quickly.

Growth of the Indian economy

As of the end of the fiscal year 2021–22 (Q4FY22), India’s Gross Domestic Product (GDP) increased by 4.1 percent. In terms of the entire fiscal year, 2021–2022, the GDP increased by 8.7 percent. The National Statistical Office (NSO) reports that the Indian economy expanded by 13.5% in the three months ending in June 2022.