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Wholesale price index (WPI)-based inflation for February was higher at 2.93 per cent, against 2.74 per cent recorded in the same month of last year.
It was also higher than 2.76 per cent inflation recorded in January this year.
Build-up inflation rate (April-February) in the financial year so far was 2.75 per cent compared to a build up rate of 2.56 per cent in the corresponding period of the previous year.
Inflation of primary articles, which include potato, onion, fruits and milk, increased to 4.84 per cent, higher than 3.54 per cent in January. ‘Fuel and power’ segment increased to 2.23 per cent against 1.85 per cent in January.
Experts’ take
Madan Sabnavis, Chief Economist, CARE Ratings, said the WPI inflation number has started to move upwards and will continue to do so in the coming months. The hardening of crude oil prices as well as reversal in prices of some food items will exert upward pressure, he said.
“The surprising element has been declining inflation for manufactured goods which is not good news for industry as it shows limited pricing power. WPI inflation will continue to remain higher than CPI inflation in the next few months,” Sabnavis said.
Sunil Kumar Sinha, Director-Public Finance and Principal Economist, India Ratings, said: “With overall inflation still in the comfort zone and GDP growth momentum waning, Ind-Ra believes the RBI may go for a rate cut in its first bi-monthly monetary policy statement of 2019-20”.
Though fuel and manufacturing inflation continues to be moderate, the main thrust for February WPI came from higher food inflation which jumped to 4.3 per cent compared to 2.3 per cent in January, Sinha said.
At a more disaggregated level inflation in some of the select cereal items such as wheat, jowar, bajra, maize, barley is now in double digit. Pulses, which as a category was witnessing deflation till November 2018, is now witnessing double digit inflation, he said.
Also vegetables as a category witnessed 6.8 percent inflation in February 2019 despite a high base.
“Clearly inflation in food items is inching up and is gradually finding its reflection in the retail inflation as well. Though vegetables and pulses at retail level are still showing deflation, it is waning and Ind-Ra believes they will also start witnessing inflation in the near term”, Sinha said.
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