CPI inflation seen at 4.8% in FY18, fears exaggerated: Report

Source: The Hindu Business Line, Apr 18, 2016

New Delhi: Retail inflation is expected at 4.8 per cent in 2017-18 and fears in this regard are exaggerated as the country will continue to witness benign prices.

According to SBI’s research report Ecowrap, the Reserve Bank’s inflation forecast of 4-4.5 per cent will be “materially undershot” as CPI inflation is unlikely to breach the 4 per cent mark till July this year.

According to official data, wholesale inflation eased to 5.7 per cent in March on declining fuel prices and appreciating rupee. Read the rest of this entry »

WPI eases to 5.7% in march, food inflation rises to 3.12%

Source: The Economic Times, Apr 18, 2017

NEW DELHI: India’s wholesale inflation eased to 5.70% in March from a three-year high of 6.55% in the previous month thanks to a slower increase in prices of fuel and in manufacturing sector, even as costlier vegetables pushed up food inflation during the month.

Food inflation firmed up to 3.12% in March from 2.69% in February, led by an inflation in vegetable prices that had been falling for the past six months. Wholesale price inflation had declined 0.45% in March last year, data released by the commerce and industry ministry on Monday showed.

“We believe that there is an upside risk to the inflation with the increasing global commodity prices and expectation of possible below-normal monsoon. A clearer picture will emerge in July-August,” said Madan Sabnavis, chief economist at CARE Ratings. Core wholesale inflation declined to 2.1% in March. Read the rest of this entry »

Pricier food, fuel push WPI inflation to 39-month high

Source: The Hindu Business Line, Mar 14, 2017

New Delhi: Retail and farm gate prices surged in February as food articles and fuel products became more expensive.Data released on Tuesday revealed that consumer price index (CPI) based inflation rose to a four-month high of 3.65 per cent in February this year as against 3.17 per cent in January. It was, however, much higher at 5.26 per cent in February last year.

Meanwhile, the wholesale price index based inflation, which was also released today, jumped up to a 39-month high of 6.55 per cent in February because of costlier food and fuel items. It was 5.25 per cent in January and had contracted by 0.85 per cent in February 2016. The data, combined with expectation of economic growth of 7.1 per cent this fiscal, may leave little legroom for the central bank to lower policy rates. Waiting for the impact of demonetisation to play out, the Reserve Bank of India had left rates unchanged in its last policy review. The Monetary Policy Committee will now meet on April 5 and 6.

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Fuel pushes wholesale inflation to 2.5-year high

index.jpgSource: The Economic Times, Feb 15, 2017

NEW DELHI: Costlier fuel and an adverse base effect pushed wholesale inflation to a two-and-a-half year high in January, even as price rise in food items remained muted.

Wholesale inflation for January came in at 5.25% compared with 3.39% in December, data released by the commerce and industry ministry on Tuesday showed.Core wholesale inflation, or nonfood, non-fuel inflation, firmed up to a 28-month high of 2.67% in sync with an over 5% reading for core consumer inflation.index.jpg

Data released on Monday showed consumer inflation fell to a five-year low of 3.17% because of weak food inflation, but it is expected to firm up in the coming months.

Higher global commodity prices led by 18.14% inflation in the fuel and power segment drove Wholesale Price Index (WPI) to its highest level since July 2014. Fuel inflation was 8.65% in December.

“Higher WPI inflation along with benign CPI (consumer price index) inflation is likely to further widen the wedge between retail and wholesale inflation, with the latter significantly overshooting the former. High core WPI and CPI inflation continues to weaken the case for a rate cut in the foreseeable future,” said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank.

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Inflation seen cooling in January, output eases

indexSource: The Economic Times, Feb 09, 2017

BENGALURU: Inflation likely cooled in January to the lowest in at least five years, after food prices fell and demand weakened following Prime Minister Narendra Modi’s ban on high-value currency notes, a Reuters poll predicted.

Consumer price inflation has been below 4 percent since Modi’s Nov. 8 decision to abolish 500- and 1,000- rupee notes wiped out 86 percent of the currency in circulation, hurting demand in India’s largely cash-based economy.

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Inflation up 3.39 per cent, may rise further in January and February

Source: The Economic Times, Jan 16, 2017

NEW DELHI: As wholesale prices rose 3.39 per cent in December, India Inc today said the focus should be on growth-oriented reforms that boost consumption, investment and job creation, while economists opined that inflation may rise in January and February.

“At this juncture, it remains critical to further growth considerations. The latest index of industrial production numbers have reported an improvement; but this has come on the back of a favourable base.

“For a sustained turnaround, we will need to keep the focus on reforms. The forthcoming Union Budget is being looked forward to with great anticipation and should focus on driving consumption, investment and job creation,” Ficci President Pankaj Patel said.

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Govt keeps inflation pressure at bay in 2016, but hiccups loom

Source: Business Standard, Jan 02, 2017

New Delhi: In spite of a smooth transition to a new inflation-targeting mechanism, crude price rearing its ugly head is a grim reminder that it will be a tough job ahead to keep retail price increase at the 2016 level of around 5 per cent.

One of the landmark achievements of 2016 was an adoption of the inflation-targeting framework and moving to collective interest rate decision-making.

Under the new mechanism, the government has mandated RBI to bring down inflation to below 6 per cent by January 2016 and then target a level of 4 per cent by March next year. This will bring predictability while the effectiveness of its monetary tools would increase because inflation targeting will take into account future – rather than past – price trends.

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