April 18, 2017 2:33:40 am
The wholesale Price Index (WPI)-based inflation softened to 5.7 per cent in March 2017 despite the hardening of food prices. The decline was driven by low inflation for metals and appreciation of rupee against the dollar.
In February, the WPI inflation, that reflects that annual rate of price rise, stood at 6.55 per cent. According to the official data released on Monday, the food prices rose by 3.12 per cent in March as against 2.69 per cent in the previous month and was led by jump in prices of vegetables (5.7 per cent) and fruits (7.62 per cent).
On the other hand, the manufactured items witnessed softening in price rise, with inflation at 2.99 per cent in March as against 3.66 per cent in February. The government also revised upwards January inflation to 5.53 per cent from the provisional estimate of 5.25 per cent.
“The sequential decline in headline WPI inflation in March 2017 was slightly sharper than expected and fairly broad-based, with all the major categories other than primary food inflation displaying a downtrend. A waning of the unfavourable base for minerals as well as the 1.8 per cent appreciation of the INR relative to the US dollar, cooled WPI inflation in March 2017,” said Aditi Nayar, principal economist, ICRA. While the WPI inflation eased, the retail inflation — CPI, on which RBI frames its monetary policy stance — touched a five-month high of 3.81 per cent in March on account of costlier food items and non-food products like fuel and light. Research houses are of the view that there is an upside risk to inflation. “We believe that there is an upside risk to the inflation with the increasing global commodity prices and expectation of possible below-normal monsoons…” said a report by CARE Ratings.
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