Inflation moves up to 6.84% in Feb
New Delhi,Mar 14 (PTI) After declining for four consecutive months,inflation rose marginally to 6.84 per cent in February as food items such as rice,wheat,onions and
fruits became costlier.
Inflation based on the Wholesale Price Index (WPI) had stood at 6.62 per cent in January. In February,2012,it was 7.56 per cent.
The upward pressure on inflation may make it harder for the Reserve Bank to lower interest rates. It had projected March-end inflation at 6.8 per cent.
Ahead of the monetary policy review next week,RBI Governor D Subbarao said yesterday that inflation reading of above 6 per cent demands tightening of the policy stance.
Meanwhile,as per official data released today the rate of price rise in the manufactured items category witnessed a slight decline at 4.51 per cent last month.
Overall,inflation rate in food articles category,which has a 14.34 per cent share in the WPI basket,too witnessed a decline at 11.38 per cent. Inflation in the food articles category was at 11.88 per cent in January.
Onions were costlier by 154.33 per cent for the month of February,as against the inflation rate of 111.52 per cent in January.
Rice became costlier by 18.84 per cent in February,as against 17.31 per cent in the previous month. However,inflation in vegetables was at 12.11 per cent,from 28.45 per cent in January.
Inflation rate in wheat and cereals stood at 21.63 per cent and 19.19 per cent respectively in February.
Potato and pulses prices declined by 45.99 per cent and 14.96 per cent,from 79 per cent and 16.89 per cent respectively in January 2013.
While the inflation rate in egg,meat and fish category stood at 12.85 per cent,for milk it was up 4.57 per cent. Fruits were costlier by 8.93 per cent.
For the fuel and power category,it was up by 10.47 per cent in February,compared to 7.06 per cent in January 2013.
ROBERT PRIOR-WANDESFORDE,DIRECTOR,ASIAN ECONOMICS RESEARCH,CREDIT SUISSE,SINGAPORE
“The core inflation surprisingly came down to 3.8 percent,lowest since March 2010. That will give some comfort to the Reserve Bank of India to cut rates,though it would have liked the headline number to come down further. But it would be strange not to cut interest rates on the basis of LPG and onion prices going up.”
“Firm WPI inflation numbers are unlikely to throw a spanner in the way of rate cut expectations. As we had anticipated,the lower weightage of food prices shielded the headline as compared with CPI print,though impact from fuel was substantial.
“Nonetheless,RBI had long called for an adjustment in subsidised fuel prices and,with the government displaying commitment to fiscal consolidation at the recent budget,we retain our rate cut call for next week. Notably core WPI has also eased below the 4.0 percent ballpark. After next week’s cut,RBI might highlight that the quantum of easing hereafter will be contingent on easing inflation and the government’s intent to follow-through with plans to correct the fiscal imbalances.”
NITESH RANJAN,ECONOMIST,UNION BANK OF INDIA,MUMBAI
“It is a tad higher than our estimate of 6.6 percent. Favourable factor is easing in manufactured product inflation. Though fiscal continued…