Wednesday, Nov 26, 2014

Fall in food prices brings down April inflation to 2-month low of 5.20 per cent

India's wholesale prices-based inflation in April slowed to a two-month low of 5.20 pct. India's wholesale prices-based inflation in April slowed to a two-month low of 5.20 pct.
Press Trust of India | New Delhi | Posted: May 15, 2014 12:27 pm | Updated: May 15, 2014 3:15 pm

Drop in prices of food items, including vegetables, as well as fuel brought down the April inflation to 5.2 per cent, ahead of the RBI’s monetary policy review in early next month.

The inflation, measured on Wholesale Price Index (WPI), was 5.7 per cent in March.

As per the data released by the government today, the WPI inflation in the overall food segment eased to 8.64 per cent in April, from a high of 9.9 per cent in March.

Onion prices contracted 9.76 per cent in April as against a rise of 1.92 per cent in the previous month.

There was a drop in the rate of price rise in protein rich items like egg, fish and meat to 9.97 from 11.19 per cent in March.

Although there was increase in potato prices, the overall inflation in the vegetable segments eased to 1.34 per cent from 8.57 per cent in March. Fruits too were marginally costlier in April as compared to the previous month.

The WPI data further showed easing inflation in fuel and power segments as well as the manufactured items group, which include sugar and edible oils. The rate of price rise in the fuel and power segment was 8.93 per cent, as against 11.22 per cent in March.

Inflation based on Consumer Price index, on the other hand, had shot up to a three-month high of 8.59 per cent.

The RBI considers both the inflation data, along with other economic indicators, while deciding monetary policy.

Amid demand for reduction in key interest rate to boost economy, the Reserve Bank’s monetary policy review on June 3 would be keenly watch.

In April, it had chosen to keep the policy rate (repo) unchanged at 8 per cent in as retail inflation was “sticky”.

Meanwhile, the government has revised the February WPI inflation upward to 5.03 per cent from earlier estimate of 4.68 per cent.
In April, 2013 the WPI inflation was 4.77 per cent. Build up in inflation in the 2013-14 fiscal was 0.22 per cent, compared to 0.71 per cent in the previous fiscal.

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