Published: Mon, April 16, 2018
Finance | By Loren Pratt

Deflating food prices softens India's WPI inflation

Deflating food prices softens India's WPI inflation

Food and beverage prices were 0.9 per cent up, on an annual basis, while the price of utilities and housing has increased by 4.6 per cent and transportation costs were 0.7 per cent higher compared to a year earlier.

Deflating food prices softened India's wholesale price-indexed (WPI) inflation to 2.47 per cent in March from 2.48 per cent reported for the previous month, official data showed on Monday.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.04 percent, the yield on the long-term 30-year note almost steadied at 0.70 percent and the yield on short-term 2-year remained flat at -0.15 percent by 04:50 GMT.

Similarly, the protein-based food items such as eggs, meat and fish became cheaper by (-) 0.82 per cent during the month.

Furthermore, index for "Non-Food Articles" group declined by 0.3 percent to 120.2 (provisional) from 120.6 (provisional) for the previous month due to lower price of guar seed (7%), niger seed (6%), floriculture (5%), raw cotton, cotton seed, skins (raw) and gingelly seed (3% each), copra (coconut) (2%) and linseed, castor seed, raw jute, groundnut seed and rape & mustard seed (1% each). Petrol prices grew 2.55 percent in March from 43.38 percent a year ago.


INFLATION is expected to have held steady in March as a drop in food and fuel prices was offset by higher airfares around the earlier Easter holidays.

The inflation data for January was revised upwards to 3.02 per cent from the provisional estimate of 2.84 per cent. The wholesale price index was 5.11% in March 2017.

As per CSO data, inflation in the vegetables segment cooled to 11.7 per cent in March from 17.57 per cent in the previous month. It revised downwards forecast for retail inflation to 4.7-5.1 per cent for April-September and 4.4 per cent for October-March.

Two of the nine Monetary Policy Committee (MPC) members already voted to hike rates to 0.75 per cent last month, marking the first split vote since last November when rates were raised from 0.25 per cent to 0.5 per cent.

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