• Rajasthan

    Cong 99
    BJP 73
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 113
    BJP 110
    BSP 2
    OTH 5
  • Chhattisgarh

    Cong 68
    BJP 15
    JCC 7
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

WPI Inflation eases to 2.48%, but watch out for these 4 factors, says CARE

By: | Updated: March 14, 2018 4:14 PM

The Wholesale Price Index (WPI) was recorded at 2.48 percent for the month of February on the back of moderating food prices.

inflation, inflation market in india, food price index, asia bond market, rbi, central bankCARE Ratings believes that food prices will remain stable for the coming months. (Express photo)

The Wholesale Price Index (WPI) was recorded at 2.48 percent for the month of February on the back of moderating food prices. The wholesale inflation number for the month of November has been revised upwards to 4.02 percent from 3.93 percent. From the previous month’s number of 2.91 percent, WPI food inflation declined to 1.65 percent. Despite fall in food prices, WPI core inflation surged from 3.1 percent to 3.5 percent in month of December. The food index declined to 2.4 percent and vegetable index was down 16 percent. In the month of November, unseasonal rains damaged crop produce which led to higher inflation due to increase in vegetable and food prices. The crude oil price has also come down now and have settled under $65 a barrel level.

CARE view

CARE Ratings believes that food prices will remain stable for the coming months. However, inflation may witness a uptick due to these 4 reasons:

1)Rise in global oil prices

2)Unseasonal weather patterns

3)Hike in Minimum Support Price (MSP) for select crops

4)Probability of increase in prices of commodity due to trade tariffs

The wholesale inflation is likely to remain around 2.5-3 percent for the remainder of FY18 and there will not be any interest rate action from the RBI in April 2018, CARE Ratings said.

Reserve Bank of India (RBI), in its last monetary policy review meeting, maintained the status quo expecting increase in inflation. It also raised it forecast for CPI between 5.1 percent and 5 percent in the first half of FY18.

The retail inflation moderated for the month of January to 5.1 percent from a high of 5.58 percent last month. But, it was still 100 basis points higher than the central bank’s target of 4 percent.

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