Business

WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike

WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike
Written by admin
WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike

WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike

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

WPI inflation rises to 27-month high of 4.17% in February as food and fuel prices spike

Representational Picture. AFP

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

The WPI inflation was 2.03 % in January and 2.26 % in February final yr.

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

In greens the speed of value rise was (-) 2.90 % in February, towards (-) 20.82 % in the previous month.

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

Inflation in the fuel and energy basket was 0.58 % in February, towards (-) 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 latest months and due to high oblique taxes each on the centre and state degree.

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 risk-on sentiment, hardening of crude oil and fuel prices, as properly as a fading of the beneficial base impact for food objects.

Core inflation was at 5.5 % in February.

“Steep month-on-month upticks in objects such as fibres and oilseeds don’t bode properly for the CPI inflation. We keep our view that inflation dynamics will rule out any additional fee cuts, with a established order anticipated by 2021. Wanting forward, we count on giant upticks in the WPI inflation over the following three months, as the wedge between the commodity prices and their year-ago degree intensifies,” Nayar mentioned.

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

The headline WPI inflation is predicted to harden additional to round 9-9.5 %, and the core-WPI inflation is probably going to climb to 7-7.5 % by Could 2021, earlier than displaying a extra gradual moderation to 4 % every by the top of 2021, Nayar added.

ITM B-Faculty HoD Prof Krupesh Thakkar mentioned “we nonetheless maintain our view of RBI’s Financial Coverage Committee’s stance of accommodative coverage with no change in short-term rates of interest once they meet in April 2021. Nevertheless, some emphasis could be given on rising fuel prices and its impression on different merchandise”.

The Reserve Financial institution of India (RBI) in its financial coverage choice 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 cost-push pressures seen in latest months.

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

Subscribe to Moneycontrol Professional at ₹499 for the primary yr. Use code PRO499. Restricted interval supply. *T&C apply

#WPI #inflation #rises #27month #high #February #food #fuel #prices #spike

About the author

admin