Wholesale price inflation slows down to 2.47% in March

  • Wholesale price inflation slows down to 2.47% in March

Wholesale price inflation slows down to 2.47% in March

Inflation was at 2.48 per cent rise in February and 5.11 per cent in March a year ago.

Inflation based on the wholesale price index (WPI) eased to 2.47 percent in March helped by a fall in food prices. Compared to March 2017, food prices were 1.1 per cent higher, while non-food and services prices rose by 1.2 per cent and 4.6 per cent, respectively.

That compares to the Reserve Bank's quarterly projection of 0.6 per cent for an annual rise of 1.1 per cent.

Under this, index for "Food Articles" group declined by 0.4 percent to 137.2 (provisional) from 137.8 (provisional) for the previous month due to lower price of egg (5%), gram, tea, coffee, poultry chicken and condiments & spices (3% each), rajma (2%) and fish-inland, masur, bajra, fruits & vegetables and beef and buffalo meat (1% each).

INFLATION is expected to have held steady in March as a drop in food and fuel prices was offset by higher airfares around the earlier Easter holidays.

Prices of the other major group under the WPI, manufactured products, which comprise almost 64.23 per cent of the index, recorded a 3.03 per cent rise.

In addition, the cost on fuel and power category, which commands a 13.15 per cent weightage in the index increased at a slower pace of 4.70 per cent from a growth of 22.35 per cent YoY.

Meanwhile, the WPI inflation for January 2018 has been revised upwards to 3.02 per cent from a level of 2.84 percent (provisional) earlier. The price of petroleum coke (11 per cent) and kerosene (2 per cent) moved up.

"Unlike the retail inflation which dipped by 16bps in March 2018 over the previous month, the wholesale inflation remained flat".

The inflation based on Consumer Price Index (CPI), a key data factored in by the RBI to arrive at interest rate, was 4.44 per cent in February.

The ease in inflation was attributed to falling prices of food items, particularly vegetables and pulses. It revised downwards forecast for retail inflation to 4.7-5.1 per cent for April-September and 4.4 per cent for October-March.

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