India's WPI Inflation Rises to 2.37% in December 2024- Here's What Is Driving The Prices

India’s wholesale price index (WPI)-based inflation rose sharply to 2.37% in December 2024, compared to 1.24% in November, according to data released by the Ministry of Commerce and Industry on Tuesday. The rise was attributed to escalating costs of food articles, fuel, and manufactured goods, reflecting seasonal factors and global economic pressures.

In comparison, WPI inflation stood at 0.73% in December 2023 and 2.36% in October 2024, showing a steady upward trend. However, the month-over-month change in WPI was (-)0.38% in December compared to November 2024.

Food Inflation Leads the Surge
Food articles inflation remained a critical factor, increasing by 8.47% in December, although slightly lower than November’s 8.63%. Within this category:

Vegetable inflation rose marginally to 28.65% in December from 28.57% in November.
Potatoes reported a staggering inflation rate of 93.20%, while onions surged to 16.81% from 2.85% in November.
Wheat prices climbed by 7.63%, and eggs, meat, and fish inflation stood at 5.43%.
Government officials attributed these hikes to seasonal supply constraints, rising transportation costs, and logistical challenges.

Fuel Costs Escalate
The Fuel and Power index rose by 1.90% to 149.9 in December, up from 147.1 in November, marking a significant contributor to inflation. Year-on-year, fuel and power inflation was at -3.79% in December, improving from -5.83% in November. Rising global crude oil prices, which hit a seven-month high, added pressure on domestic energy costs.

Manufactured Goods Inflation Remains Stagnant
The Manufactured Products index remained unchanged at 143.0 in December. However, the inflation rate for manufactured goods slightly increased to 2.14% from 2.00% in November. Higher prices for chemicals, metals, and machinery reflected both global commodity trends and domestic manufacturing costs.

Primary Articles and Non-Food Inflation
Inflation for primary articles increased to 6.02% in December from 5.49% in November. Non-food articles saw a notable jump to 2.46%, recovering from -0.98% in November. Meanwhile, minerals inflation eased to 5.47%, down from 5.89%.

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