Retail inflation up at 7.96% on costly food items

Source: Business Standard, Aug 13, 2014

New Delhi: Pushed by food items, the Consumer Price Index (CPI)-based inflation rose to 7.96 per cent in July from 7.46 per cent in June, which was an all-time low since the new series was launched in January 2011.a

The official data, issued on Tuesday, justified the Reserve Bank of India’s stance of not cutting the policy rate at its review earlier this month. However, inflation in July was still the third lowest in the series. Beside June 2014, it was only in January 2012 that inflation was lower than this July. In January 2012, it was 7.55 per cent.

Besides, it was quite below the 9.64 per cent rise in July 2013. Inflation in June was revised up from the earlier estimate of 7.31 per cent.

The data, released by the ministry of statistics and  programme implementation, showed the distribution of inflation between rural and urban parts had undergone  a change over the year. In July, rural inflation stood higher at 8.45 per cent against 7.42 per cent in urban parts. However, a year before (July 2013), urban  inflation was 10.18 per cent, above the 9.14 per cent in villages.

In both urban and rural areas, inflation rose compared  to the previous month of June, when it had stood at 7.87 per cent in villages and 6.82 per cent in urban parts.

The inflation in July rose mainly due to the rate of price rise in food items, which have 45 per cent weight in the CPI. Food inflation increased to 9.36 per cent in July against 8.05 per cent in June. It was 11.22 per cent in July 2013.

The data came  on the day the India Meteorological Department cut its forecast for monsoon rain to 87 per cent of the long period average against its earlier  projection of 93 per cent.

The low monsoon rain might mainly affect production of pulses and oilseeds. Inflation in both these food categories was manageable in July, even as it rose 5.85 per cent in the month against 5.17 per cent in June. Edible oil saw inflation at 0.7 per cent in July against 0.35 per cent the previous month.

In fact, these were other commodities, particularly vegetables and fruit, which witnessed quite higher inflation. Vegetable prices rose 16.88 per cent in July year-on-year, against 8.73 per cent in the previous month and fruits turned more expensive by 22.48 per cent against 20.64 per cent in June.

Inflation in milk was 11.26 per cent against 11.06 per cent. However, inflation in fish, meat and eggs fell to 7.68 per cent against 8.28 per cent.
Aditi Nayar, senior economist with ICRA, said, “Food inflation rose in the just-concluded month…The delayed sowing of crops, as well as the shortfall in area covered so far, suggest that prices might remain firm in the coming months, a key concern for ensuring CPI at or below eight per cent in January 2015.”

RBI has targeted to keep CPI inflation at eight per cent in January 2015 and bringing it  down to six per cent by January  2016.

Nayar said any improvement in demand conditions could prevent a sustained easing of inflationary pressures. “With such factors posing upside risks to the inflation target of six per cent for January 2016, RBI would continue to focus on reining in inflationary expectations, resulting in a low likelihood of monetary easing in the remainder of 2014.”

Fuel and light prices rose 4.47% in July on a yearly basis, against 4.58% in June.Inflation in clothing, bedding and footwear declined to 7.31% in July against 8.65% in June.

Core inflation pressures remain

Source: Business Standard, Jul 15, 2014Core inflation pressures remain

New Delhi: India’s Wholesale Price Index-based (WPI) inflation fell to a four-month low of 5.4 per cent in June from six per cent in May. While the fall in inflation came from lower food and fuel inflation, the manufacturing inflation in fact edged up slightly.

A decline in inflation in foodgrain, fruit and vegetables, egg, meat and fish drove food inflation down to 8.1 per cent in June from 9.5 per cent in May. Fuel inflation also fell by 1.5 percentage points to nine per cent, as petrol prices fell from the 28-month high seen last month. A part of the fall seen in both food and fuel inflation was also due to the strong base effect from the same month last year.

The non-food manufacturing inflation – the Reserve Bank of India (RBI)’s measure of core inflation – edged up to 3.9 per cent in June from 3.8 per cent in May. Core inflation captures demand-side pressures on prices and is expected to rise as the economy grows. Industrial production for May (4.6 per cent year-on-year growth) signals that the economy is witnessing green shoots of recovery. As the growth recovers, price pressures across several manufacturing categories such as beverages, textiles, chemicals and machinery and machine tools will rise further.

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PM for Centre-state coordination to deal with inflation

InflationSource: Times of India, Jun 27, 2014

NEW DELHI: Amid weakening of monsoon and rise in food prices, Prime Minister Narendra Modi on Thursday pushed for close coordination between the centre and states on implementing contingency plans and asked states to set up fast-track courts to deal with hoarders and black-marketeers.

Holding a meeting with Cabinet colleagues to review the progress of monsoon and steps taken to contain inflation, the Prime Minister directed that adequate water, power and seed supply should be ensured to the farmers so that the production is not affected due to scant rainfall.

The meeting was told that the monsoon has been weak but it is likely to “improve substantially” in the next two months and steps taken to contain inflation have shown “positive effect”.

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Wholesale inflation at 5-month high

InflationSource: Business Standard, Jun 17, 2014

New Delhi: Wholesale Price Index (WPI)-based inflation rose to a five-month high of 6.01 per cent in May from 5.2 per cent in the previous month, driven by costlier protein-based items, fuel and some manufactured products.In May 2013, WPI inflation was 4.58 per cent.

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On new govt table, a report on tackling inflation by Narendra Modi

InflationSource: Financial Express, May 19, 2014

New Delhi: On tackling runaway inflation, an area where the UPA administration’s consistent failure in its second term is a reason being cited for its electoral rout, the NDA government has a ready reckoner in the form of a detailed action plan — with 20 specific recommendations and 64 actionable points — even before it assumes office. More pertinent is the fact that this detailed report was prepared by a panel headed by Prime Minister designate Narendra Modi in his capacity as Gujarat Chief Minister and was submitted to outgoing PM Manmohan Singh in March 2011.

The recommendations — including reforms of the APMC Act, liberalisation of agri-markets, along with an unbundling of FCI operations of procurement, storage and distribution — will form the blueprint for the NDA government’s supply-side attack on inflation, according to a representative of the BJP economic cell.

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April WPI inflation at 2 month low of 5.20 per cent

April WPI inflation at 2 month low of 5.20 per centSource: The Economic Times, May 15, 2014

NEW DELHI: Drop in prices of food items, including vegetables, as well as fuel brought down the April inflation to 5.2 per cent, ahead of the RBI’s monetary policy review in early next month.

The inflation, measured on Wholesale Price Index (WPI), was 5.7 per cent in March. As per the data released by the government today, the WPI inflation in the overall food segment eased to 8.64 per cent in April, from a high of 9.9 per cent in March. Onion prices contracted 9.76 per cent in April as against a rise of 1.92 per cent in the previous month.

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Retail inflation rises to 3-month high of 8.59%

Retail inflation rises to 3-month high of 8.59%Source: Business Standard, May 13, 2014

New Delhi: Retail price inflation rose for a  consecutive month in April to 8.59 per cent, diminishing hopes of a rate cut by the Reserve Bank of India (RBI) in its June 3 review of credit policy. A sharp rise in the prices of vegetables and fruits by 17.5 per cent and 21.73 per cent, respectively, put the consumer price index (CPI) at a three-month high.

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WPI inflation at 3-mth high may limit RBI policy scope

InflationSource: The Economic Times, Apr 16, 2014

NEW DELHI: Both wholesale and consumer inflation rose more than expected in March because of pricier food articles, dashing hopes of any immediate monetary easing by the Reserve Bank of India to support demand that seems to have stumbled of late.

The new government that will take office next month will inherit a high and sticky inflation and economy that has shown no real spark as yet, though the stock markets have run ahead in the hope of a brighter year.Wholesale inflation, as measured by the Wholesale Price Index (WPI), rose to a three-month high of 5.7% in March compared with 4.68% in February, data released by the commerce and industry ministry on Tuesday showed.

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Higher food costs in India probably pushed inflation up in March

Inflation Source: The Economic Times, Apr 15, 2014

NEW DELHI: Inflation in India is expected to have edged up on higher food costs in March, snapping a three-month easing trend that will give the central bank less scope to support the economy amid fresh signs of slowdown. Analysts say the risk of less-than-normal monsoon rains this summer will call into question assumptions that the worst is over for Asia’s third-largest economy.

Wolesale prices probably rose 5.30 per cent last month, faster than a 4.68 per cent rise in February, according to the median forecast of a Reuters poll. Consumer inflation is expected to have quickened to 8.19 per cent in March from 8.10 per cent a month ago, the poll showed.

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Retail Inflation Falls to 2-year Low of 8.1%

Source: New Indian Express, Mar 13, 2014

New Delhi: Moderate easing of vegetable prices especially that of onions and potatoes helped retail inflation in February to settle at a 25-month low of 8.1 per cent. The Consumer Price Index-based inflation was at 8.79 per cent last month.

Easing of inflation could guide the Reserve Bank to lower interest rate in the next monetary policy review slated for April 1.

Industry has been demanding a cut in interest rates to boost economic growth, which has slowed to a decade-low level.

According to CPI data made available on Wednesday, overall inflation in the food basket slowed to 8.57 per cent in February from 9.9 per cent in the previous month.

INFLATION

The rate at which vegetable prices increased eased to 14.04 per cent as against 21.91 per cent in January.

The data showed inflation rates for rural and urban areas were at 8.51 per cent and 7.55 per cent, respectively.

Prior to the month under review, the lowest CPI was recorded in January 2012 at 7.65 per cent.

Retail or consumer inflation also slowed in protein-rich items such as eggs, fish and meat to 9.69 per cent in February versus 11.69 per cent in January.

The rate of price rise slowed to 9.93 per cent for cereals and related products from 11.42 per cent in January. However, price of milk and allied products picked up in February to 10.37 per cent from 9.82 per cent in the previous month.

 

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