WPI Inflation Hits 10-Month Low

The Union Ministry of Commerce and Industries has released the data on WPI Inflation. The data makes the following observations:

  • The WPI Inflation fell to a 10-month low of 2.76 per cent in January owing to softening prices of fuel and some food items.
  • The WPI inflation has stood at 3.8 per cent in December 2018, and 3.02 per cent in January 2018.
  • Manufactured products inflation which has a weightage of 64.23 per cent in WPI declined to 2.61 per cent in January, from a level of 2.96 per cent in January 2018.
  • The wholesale based price inflation for ‘fuel and power’ segment fell sharply to 1.85 per cent as against 8.38 per cent in December 2018, due to easing in prices of motor fuel and LPG.
  • The government also revised the November WPI downwards to 4.47% from 4.64% earlier.
  • The primary articles inflation with the weightage of 22.62 per cent increased to 3.54 per cent in January from 2.53 per cent in same month last year.

In its last monetary policy review, RBI had decreased the lending rate by 0.25 per cent. It is expected that the decrease in inflation may provide further head-room to the RBI to cut interest rate (repo) in the coming months.

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