WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike – Business News , Firstpost

After witnessing months of softening of prices, the food articles in February noticed 1.36 p.c inflation. In January it was (-) 2.80 p.c

Representational Image. AFP

New Delhi: The wholesale value-based mostly inflation rose for the second consecutive month to a 27-month high of 4.17 p.c in February, as food, fuel and energy prices spiked.

The WPI inflation was 2.03 p.c in January and 2.26 p.c in February final 12 months.

After witnessing months of softening of prices, the food articles in February noticed 1.36 p.c inflation. In January it was (-) 2.80 p.c.

In greens the speed of value rise was (-) 2.90 p.c in February, in opposition to (-) 20.82 p.c in the previous month.

Inflation in pulses was 10.25 p.c in February, whereas in fruits it was 9.48 p.c.

Inflation in the fuel and energy basket was 0.58 p.c in February, in opposition to (-) 4.78 per cent in January on rising prices of petrol and diesel.

Petroleum product prices have reached historic highs as worldwide crude prices have surged in current months and due to high oblique taxes each on the centre and state stage.

ICRA Ltd Principal Economist Aditi Nayar mentioned the doubling in the WPI inflation in February displays the rise in commodity prices introduced on by the worldwide danger-on sentiment, hardening of crude oil and fuel prices, as nicely as a fading of the beneficial base impact for food objects.

Core inflation was at 5.5 p.c in February.

“Steep month-on-month upticks in items such as fibres and oilseeds do not bode well for the CPI inflation. We maintain our view that inflation dynamics will rule out any further rate cuts, with a status quo expected through 2021. Looking ahead, we expect large upticks in the WPI inflation over the next three months, as the wedge between the commodity prices and their year-ago level intensifies,” Nayar mentioned.

ICRA expects the headline and core WPI inflation to rise to round 6 p.c every in March 2021.

The headline WPI inflation is anticipated to harden additional to round 9-9.5 p.c, and the core-WPI inflation is probably going to climb to 7-7.5 p.c by May 2021, earlier than displaying a extra gradual moderation to Four p.c every by the top of 2021, Nayar added.

ITM B-School HoD Prof Krupesh Thakkar mentioned “we still hold our view of RBI’s Monetary Policy Committee’s stance of accommodative policy with no change in short-term interest rates when they meet in April 2021. However, some emphasis would be given on rising fuel prices and its impact on other products”.

The Reserve Bank of India (RBI) in its financial coverage resolution on 5 February, saved rates of interest unchanged for the fourth consecutive assembly and mentioned that the outlook for core inflation is influenced by the escalation in price-push pressures seen in current months.

Retail inflation, based mostly on the patron value index, was at 5.03 p.c in February, up from 4.06 p.c in January, information launched final week confirmed.

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