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Below View On Wholesale Inflation By Mr. Apurva Sheth, Head of Market Perspectives, Samco Securities.

India's November wholesale inflation eases to 21-month low of 5.85%

India's annual wholesale price-based inflation (WPI) eased in November to a 21-month low of 5.85 per cent year-on-year (YoY) as food prices moderated, government data showed on Wednesday. In October, the WPI-based inflation was 8.39 per cent.

It is for the second consecutive month that the WPI inflation has stayed below the double-digit mark. Before October, it was above 10 per cent for 18 straight months since April 2021. In November 2021, the WPI-based inflation was 14.87 per cent.

Please find below Reaction of Mr. Apurva Sheth on above WPI numbers

The recently announced CPI inflation came in at 5.88% falling below the RBI’s upper target of 6% for the first time since January 2022. Now with WPI too falling to a 21-month low of 5.85%, it provides confidence for the sustainability of a stable CPI going forward. One of the significant reasons for this steep fall in WPI was food inflation falling to a 22-month low of 2.17%. With better expectations of a Rabi output this year, the food inflation seems immune from supply-side worries as of now. With both the headline inflation numbers showing good improvement it would be fair to assume that we are almost standing at the cusp of the terminal rate.

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