January wholesale inflation eases to 10-month low on lower food, fuel prices

The overall vegetable prices in January declined 4.21% against a rise of 40.77% in January last year.
January wholesale inflation eases to 10-month low on lower food, fuel prices
January wholesale inflation eases to 10-month low on lower food, fuel prices
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Lower food and fuel prices eased India's wholesale inflation to 10-month low of 2.76 per cent in January 2019 from 3.02 per cent reported for the corresponding month of 2018, official data showed on Thursday.

On a sequential basis, the Wholesale Price Index (WPI) data for January, furnished by the Ministry of Commerce and Industry, showed that prices rose on a slower rate than the rise of 3.80 per cent reported for December 2018.

"The annual rate of inflation, based on monthly WPI, stood at 2.76 per cent (provisional) for January 2019 (over January 2018) compared with 3.80 per cent (provisional) for the previous month and 3.02 per cent during the corresponding month of the previous year," the Ministry said in its review of "Index Numbers of Wholesale Price in India" for January.

"Build-up inflation rate in this financial year so far was 2.49 per cent compared with 2.47 per cent in the corresponding period of the previous year."

On a year-on-year basis, the expenses on primary articles, which constitute 22.62 per cent of the WPI's total weightage, rose to 3.54 per cent from 2.53 per cent.

Similarly, prices of food articles increased on a slower rate. The category has a weightage of 15.26 per cent in the WPI index. It increased 2.34 per cent from a rise of 3.15 per cent.

The onion prices deflated (-) 65.60 per cent, whereas potatoes became dearer 26.30 per cent.

However, the overall vegetable prices in January declined (-) 4.21 per cent against a rise of 40.77 per cent in the year-ago month.

In addition, the cost of fuel and power, which commands a 13.15 per cent weightage, increased at a slower pace of 1.85 per cent from a growth of 4.73 per cent.

The expenses on manufactured products registered a rise of 2.61 per cent from 2.96 per cent.

On Tuesday, another key macro data showed that India's inflation had fallen to a 19-month low of 2.05 per cent in January.

In January, retail inflation slipped to 2.05 per cent from 5.07 per cent in a year-ago period. On sequential basis, the Consumer Price Index (CPI) in January (2.05 per cent) was lower than December's retail inflation rate of 2.11 per cent.

The CPI data released by the Central Statistics Office (CSO) showed the Consumer Food Price Index (CFPI) deflated to (-) 2.17 per cent in January from 4.70 per cent in year-ago month.

According to Sunil Kumar Sinha, India Ratings & Research Director for Public Finance and Principal Economist, "Like retail inflation even wholesale inflation declined in January to 2.76 per cent against 3.80 per cent a month ago and 3.02 per cent a year ago. This is the lowest wholesale inflation print since April 2018." 

However, unlike retail inflation the food component in the wholesale inflation recorded a rise of 2.3 per cent in January against 0.1 per cent deflation in December 2018, Sinha added.

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