Dearer food items push WPI inflation up to (-) 0.73% in December

Wholesale Price Index inflation grew to (-) 0.73 in December, against the estimate of (-)1.15%. 

The rise in WPI inflation was on the back of over 8% growth in food prices and nearly 6% rise in prices of primary articles. Food articles inflation in December stood at 8.17% while primary articles inflation was at 5.48% against 2.27% in November.

Fuel and power prices inflation was at 9.15% while inflation in manufactured products grew by 0.3% to (-) 1.36%. 

The government has also revised the October inflationary rate to (-) 3.7% from the earlier provisional (-) 3.81%.

This is the 14th straight month since November 2014 when the wholesale inflation has remained in the negative zone.

Inflation in pulses and onion stood at 55.64% and 25.98%, respectively. The rate of price rise in case of vegetables was 20.56% during December and for fruits, it was 0.76%.

The rate of price rise in potato was (-)34.99% while in egg, meat and fish it was 5.03%.

Reserve Bank may face pressure to reduce the key lending rate further as industrial production contracted by 3.2% in November, its sharpest decline in four years.

Governor Raghuram Rajan had on Wednesday said the bank will carefully look into the latest data on industrial production, and come out with a "reasoned response". Besides IIP, the central bank also looks into retail inflation data while firming up its monetary policy stance.

Retail inflation has also been rising for five straight months and stood at 5.61% in December. RBI's next bi-monthly policy review will be unveiled on February 2.

(With inputs from agencies)