India's wholesale price inflation rose unexpectedly to a seven-month high in September on higher food inflation, raising the scope for another rate hike from the central bank.
Inflation, measured by the wholesale price index, increased to 6.46 percent in September from 6.10 percent in the previous month, the Ministry of Commerce and Industry said Monday. Inflation was forecast to slow marginally to 6 percent.
On a monthly basis, wholesale prices climbed 1.24 percent in September. Data revealed that the build up inflation rate in the financial year so far was 5.64 percent compared to 4.84 percent in the corresponding period of the previous year.
Primary article prices increased 13.54 percent year-on-year, faster than the 11.72 percent rise seen a month ago. Within primary articles, onion and vegetable prices showed huge increase of 322.94 percent and 89.37 percent. Non-food article costs went up 5.17 percent.
Another component of WPI, manufactured product prices gained 2.03 percent after climbing 1.9 percent. Meanwhile, the ministry said the annual growth in fuel and power prices slowed to 10.08 percent from 11.34 percent.
Today's inflation figure is another blow to economic prospects of the nation after data showed last Friday that industrial production grew at a much slower pace of 0.6 percent in August.
Signaling that the central bank gives highest priority to gain control over inflation, the bank lifted its repo rate by a quarter point in September despite slowing growth. Inflation data has raised the possibilities for another rate increase at the next policy review on October 29.
The Reserve Bank of India's new chief Raghuram Rajan said in September that wholesale price inflation will be higher than initially projected over the rest of the year in the absence of an appropriate policy response.
The International Monetary Fund last week trimmed India's 2013 growth outlook sharply to 3.8 percent from 5.6 percent. Next year, growth is projected to be at 5.1 percent.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.