The March Wholesale Price Index (WPI) inflation at 5.7% grew at the fastest pace since December and above the consensus estimate of 5.3%. The so-called core WPI inflation, or non-food, non-oil, manufacturing inflation, too, rose from 3.15% in February to 3.5% in March. The January WPI inflation has also been revised upwards by 12 basis points to 5.17% and core inflation by 19 basis points. One basis point is one-hundredth of a percentage point.<\/p>\n
Virtually all components of inflation\u2014food articles, fuel and manufactured goods\u2014have shown faster price growth. Inflation of primary articles rose 7.7% in March against 6.3% in February. Food prices rose 9.9%, fuel and power prices rose 11.2% and the price of manufactured goods rose 3.2% in March, its fastest pace in 11 months. Higher tobacco and base metal prices propped up core inflation, the highest since March 2013.<\/p>\n
Even though the Reserve Bank of India (RBI) has started focusing on only retail inflation, or the Consumer Price Index (CPI), higher WPI in March is a surprise and particularly the rise in core inflation will be keenly watched by the banking regulator. Retail inflation, which dropped 8.10% in February, its lowest since January 2012, is expected to fall further in the coming months because of high base effect.<\/p>\n
While many say that a new government at the Centre may influence RBI to change its monetary stance from hawkish to accommodative and that there is a possibility of rate cuts in the second half of the fiscal year, these may not happen without inflationary pressures easing.<\/p>\n
Although RBI governor Raghuram Rajan may not hike rates, particularly after a 1.9% contraction in factory output in February on account of a muted domestic demand and weak exports, no rate cut is foreseeable in the near-term either.<\/p>\n","protected":false},"excerpt":{"rendered":"
The March Wholesale Price Index (WPI) inflation at 5.7% grew at the fastest pace since December and above the consensus estimate of 5.3%. The so-called…<\/p>\n","protected":false},"author":1,"featured_media":1705,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/posts\/994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/comments?post=994"}],"version-history":[{"count":1,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/posts\/994\/revisions"}],"predecessor-version":[{"id":996,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/posts\/994\/revisions\/996"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/media\/1705"}],"wp:attachment":[{"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/media?parent=994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/categories?post=994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bankerstrust.in\/column\/wp-json\/wp\/v2\/tags?post=994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}