WPI inflation eases to 2.26 pc in Feb as food articles, vegetables become cheaper

Wholesale price index (WPI) based inflation softened to 2.26 per cent in February on the back of cheaper food items and vegetables, the government data showed on Monday.

In January, the WPI inflation stood at 3.1 per cent and in the year-ago same period it was at 2.93 per cent, as per the data from the commerce and industry ministry.

The WPI inflation for food articles for February 2020 came in at 7.79 per cent as against 11.51 per cent in the previous month.

The rate of price rise for onion and potato too came down to 162.30 per cent and 60.73 per cent, respectively as against 293.37 per cent and 87.84 per cent in January 2020.

Build up inflation rate in the current financial year so far was 1.92 per cent compared to a build up rate of 2.75 per cent in the year-ago period, it added.

In the fuel and power category, wholesale inflation during the month eased to 3.38 per cent while for non-food articles it slowed to 6.82 per cent.

For eggs, meat and fish category, the inflation went up to 6.88 per cent and for manufactured products it was higher at 0.42 per cent.

WPI inflation for LPG gas jumped to 21.85 per cent during the month as against 1.78 per cent in January.

"The considerable decline in the WPI inflation in February 2020 is in line with our forecast, led primarily by food items, as well as a modest contribution of the correction in prices of crude oil and minerals, which would intensify in the ongoing month," said Aditi Nayar, economist with ICRA.

In contrast, the core-WPI recorded a narrower disinflation in February 2020, which is expected to reverse reflecting the growing impact of the coronavirus outbreak on prices, demand and sentiment, she added.