Crisil core inflation tracker: Sharp fall in WPI led by food and fuel

Going forward, food inflation could stay under check if monsoons are normal and global food prices stay benign

Wholesale Price Index (WPI) inflation rate dipped for the second month in a row, plummeting 70 basis points (bps) to 2.8 per cent in January. WPI inflation had peaked to 4 per cent in November. 

The steep fall was led by a decline in food and fuel inflation and some easing in core inflation, the latter reflecting the weak pricing power of manufacturers. However, after staying stable for three consecutive months, inflation in manufactured products surged owing to higher global metal prices. 

So far this fiscal year (April to January), WPI inflation has averaged 2.9 per cent compared to 1 per cent