Wholesale inflation falls, even though food prices see a spike

RSTV Bureau

Vegetables-Fruits-Inflation-01-400x265Inflation based on the Wholesale Price Index (WPI) slipped to 5.70 per cent for March as manufactured goods showed a cost decline, even though food prices hardened.

In February WPI inflation was 6.55 per cent. WPI inflation reflects the annual rate of price rise.

According to official data released on Monday, food prices saw a sharp rise of 3.12 per cent in March compared to 2.69 per cent in the previous month.

This was primarily because of a steep price jump in vegetables which saw an inflation of 5.70 per cent. Fruits too saw a high inflation that stood at 7.62 per cen. For eggs, meat and fish, the inflation stood at 3.12 per cent.

Fuel inflation declined to 18.16 per cent in March, from 21.02 per cent in February.

The manufactured items witnessed some softening in price rise, with inflation at 2.99 per cent in March, as against 3.66 per cent in the previous month.

The government also revised upwards January inflation to 5.53 per cent from the provisional estimate of 5.25 per cent.

Earlier this month, the Reserve Bank had left key policy rate unchanged at 6.25 per cent for the third review in a row citing upside risks to inflation. But it had increased the reverse repo rate – the rate at which the RBI pays banks for parking funds with it — by 0.25 per cent to 6 per cent, narrowing the policy rate corridor.

For 2017-18, it projected retail inflation to an average of 4.5 per cent in the first half and 5 per cent in the second half.

Data released last week showed that retail inflation touched a five-month high of 3.81 per cent in March on costlier food items and non-food products like fuel and light.

(With inputs from PTI)