March WPI inflation hits eight-month low to 2.47%

A vendor arranges vegetable at his stall in a market in Mumbai

A vendor arranges vegetable at his stall in a market in Mumbai

The poll also found the core consumer price index, which includes oil products but excludes volatile fresh food prices, was expected to rise 0.9 percent in March from a year ago versus a 1.0 percent gain in February.

India's wholesale price inflation eased for the fourth straight month in March, though fractionally, data from Ministry of Commerce & Industry showed Monday.

It revised downwards its forecast for retail inflation, to 4.7-5.1 percent for the April-September period and 4.4 percent for the October-March period.

Index of primary articles in WPI declined by 0.5% to 127.4 (provisional) from 128 (provisional) for the previous month. However, the price of ragi (3%), jowar and fish-marine (2% each) and peas/chawali, moong, betel leaves, wheat, paddy and pork (1% each) moved up.

On the other hand, the index for "Manufacture of Textiles" sub-group rose by 0.4 per cent to 114.1 from 113.7 for the previous month due to higher price of viscose yarn, knitted and crocheted fabrics, synthetic yarn and weaving and finishing of textiles (1 per cent each). Food articles inflation contracted in March 2018 at 0.29 per cent.

The inflation data for January was revised upwards to 3.02 per cent from the provisional estimate of 2.84 per cent. However, the price of raw silk (7%), mesta and hides (raw) (5% each), sunflower (4%), soyabean (3%), fodder (2%) and raw wool, coir fibre and raw rubber (1% each) moved up.

However, the price of iron ore, chromite, manganese ore, limestone, zinc concentrate and lead concentrate moved up.

The index for "Crude Petroleum & Natural Gas" group declined by 0.5% to 80.2 (provisional) from 80.6 (provisional) for the previous month due to lower price of crude petroleum (1%).

The primary articles hold weightage of 22.62% in WPI.

"We suspect that these factors will mean that we see another step-down in CPI inflation in March such that it falls to a one-year low of 2.5 per cent".

Inflation in "fuel and power" basket however rose to 4.70 percent in March from 3.81 percent in the previous month.

Despite keeping rates on hold, the committee said that "ongoing tightening of monetary policy" would be needed to bring inflation back to the Bank's 2 per cent target.

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