Published: Tue, April 17, 2018
Markets | By Erika Turner

WPI inflation eases to 2.47% in March as food articles turn cheaper

WPI inflation eases to 2.47% in March as food articles turn cheaper

The latest WPI inflation print is the lowest since July 2017.

The rating agency said the slight acceleration in inflation for March is primarily attributable to an anticipated recovery in food inflation, which temporarily dipped to 3% in February from 3.8% in January.

"The annual rate of inflation, based on monthly WPI, stood at 2.47 percent (provisional) for March 2018 (over March 2017) as compared to 2.48 percent (provisional) for the previous month and 5.11 percent during the corresponding month of the previous year", the ministry said in its report.

Wholesale food prices in March fell 0.07% year-on-year, compared with a 0.07% rise a month earlier.

For 2018, the economists decreased the median inflation estimate for the eleventh consecutive week, to 3.48%, from 3.53% in the previous survey. The retail inflation slowed down mainly on account of easing food prices including vegetables.

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According to a data released on Monday, food articles witnessed deflation after about eight months as vegetables, cereals, pulses, eggs, meat and fish, turned cheaper. However, the March 2018 inflation is higher than 3.89 per cent recorded in the same month a year ago.

However, if the firmness in the core inflation at the retail level continues, it will soon begin to reflect at the wholesale level as well, Sinha said. The price of petroleum coke (11 per cent) and kerosene (2 per cent) moved up.

However, the extent of pass through of higher crude oil prices to retail fuel prices, in light of whether the uptick is absorbed by the oil marketing companies or cuts in excise/VAT are instituted by the Central or State Governments, remains to be seen, she added.

Index for "Minerals" group declined by 2.0 percent to 119.7 (provisional) from 122.2 (provisional) for the previous month due to lower price of copper concentrate (14%) and phosphorite (1%).

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