The Wholesale Price Index (WPI) for the month of January was recorded 2.84% easing further on lower food prices as compared to 3.58% in the previous month. The WPI Inflation has beat ET Now poll which had estimated the index to be 3.1%. Meanwhile, the November WPI inflation has been revised upwards to 4.02% from 3.93%.
The WPI food inflation fell to 1.65% from previous month’s 2.91%. However, WPI core inflation, on the contrary, rose to 3.5% from 3.1% in December. The vegetable index is down 16% and food index is down 2.4%. The inflation rose significantly in November when unseasonal rains damaged crops leading to higher vegetable and food prices.
The price of crude oil was also on a rising streak, which has now settled below $65 a barrel on news of higher production by the United States and Iran. Anticipating higher inflation, the Reserve Bank of India, however, maintained status in its February monetary policy meeting for the third time and also raised its CPI Inflation forecast between 5.1% and 5% in the first half of the next fiscal.
On the back of a three month low WPI Inflation in December, the CPI Inflation in January eased a little as well from a high of 5.58% to 5.1%. However, it was still 100 basis points higher than RBI’s target of 4%.