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WPI soars to 39-mth high of 6.55%, retail inflation too rises

Press Trust of India  |  New Delhi 

Wholesale soared to a 39-month high of 6.55 per cent in February and retail inched up to 3.65 per cent due to rise in food and fuel prices, justifying the RBI's move to hold rates in last policy meet.

However, the prices of vegetables and pulses remained subdued during the month, giving some relief to consumers, showed the data released by the today.


The Wholesale Price Index (WPI) based in January was at 5.25 per cent, while the consumer stood at 3.17 per cent.

The rising is likely to refrain the Reserve from cutting in its next monetary policy review on April 6.

According to the data, food witnessed a sharp 2.69 per cent rise in February, while the fuel basket surged by 21.02 per cent.

Although the rates of cereals, rice and fruits witnessed an increase, vegetables prices declined by 8.05 per cent during February.

The December rate was revised upwards to 3.68 per cent from the previous 3.39 per cent.

As regards the CPI, it rose to a 4-month high of 3.65 per cent in February after touching a multi-year low of 3.17 per cent in the previous month.

Food at the retail level was recorded at 2.01 per cent, while that in fruits was higher at 8.33 per cent, and fuel and light at 3.9 per cent in February. The rate of price rise in meat and fish was 3.5 per cent.

Prices of sugar and confectionery items rose by 18.83 per cent in February while in milk and milk product increased by 4.22 per cent.

The rate of in household goods and services was 4.09 per cent, while it stood at 4 per cent in health segment. The transport and communication became expensive by 5.39 per cent.

ICRA Principal Economist Aditi Nayar said the likelihood of a repo rate cut by the RBI in April 2017 remains subdued, given its focus on bringing to 4 per cent in a durable manner.

"CPI is expected to rise to above 4.5 per cent in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend," Nayar said.

Industry chamber Assocham said the RBI need not get excessively worried about rising and the easing of the cycle should continue, because the latest does not indicate any improvement in the pricing power of the manufacturers.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 14 2017. 20:08 IST
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