WPI cools to 10-month low of 2.76% in Jan on cheaper fuel


Source: The Economic Times, Feb 14, 2019

NEW DELHI: Lower inflation in fuel made India’s wholesale price inflation (WPI) cool to 2.76% in January from 3.8% in December, data released by the commerce and industry ministry on Thursday showed.


It was 3.02% in January last year.

Inflation in fuel and power rose 1.85% from 8.38% in December and that in manufactured products 2.61% in January from 3.59% in the trailing month.

“The rate of inflation based on WPI Food Index consisting of ‘Food Articles’ from Primary Articles group and ‘Food Product’ from Manufactured Products group increased from 0.07% in December, 2018 to 1.84% in January, 2019,” the ministry said in an official release.

The government also revised the November WPI downwards to 4.47% from 4.64% earlier.

Inflation in cereals, wheat and pulses increased 7.95%, 9.94% and 7.55%, respectively.

Data released on Tuesday showed a decline in India’s retail inflation to an 18-month low of 2.05% in January.

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Retail inflation dips further to 2.05% in January, lowest in 19 months

The consumer price inflation (CPI) for the month of January further declined to 2.05 per cent on the back of drop in food prices and smaller increases in fuel costs.

Industrial production jumped to 2.4 per cent in December, 2018 from 0.5 per cent in November, 2018 driven mainly by a sharp spike in manufacturing index which rose to 2.7 per cent vs -0.4 per cent month-on-month.

A Reuters poll of 30 economists had predicted CPI to have accelerated to 2.48 per cent in January.

This is the sixth straight month where the inflation has remained below the RBI’s medium term target of 4 per cent.

The CPI for the month of December was revised to 2.11 per cent from the earlier figure of 2.19 per cent.

The core inflation also fell to 5.4 per cent in January from 5.7 per cent in December alleviating some concerns over stickiness in non-food, non-fuel inflation.

The Reserve Bank of India, in its sixth bimonthly policy review, revised downwards the path of inflation to 2.8 per cent in the fourth quarter of 2018-19, 3.2-3.4 per cent in first-half of 2019-20 and 3.9 per cent in the third quarter of 2019-20, with risks broadly balanced around the central trajectory.

It also projected the inflation outlook to remain soft in the near term while flagging certain risks which merit “careful monitoring” beyond near term. These include reversal in vegetable prices, uncertainty in trade tensions and geopolitics which could impact commodity prices among others. Source: The Economic Times, Feb 12, 2019

India inflation seen speeding up in Jan but still below target

Source: The Economic Times, Feb 08, 2019

BENGALURU- Indian inflation reversed course and nudged up slightly in January but remained below the central bank’s target for a sixth straight month, a Reuters poll predicted, supporting this week’s unexpected move by policymakers to cut rates.

On Thursday, the Reserve Bank of India caught financial markets off-guard by reducing its key policy rate by 25 basis points to boost growth and as inflation has remained benign.

While a change in monetary policy stance to “neutral” was the consensus in a separate poll taken ahead of the Feb 7 meeting, only around a third of respondents expected any easing. Read the rest of this entry »

India inflation seen speeding up in Jan but still below target

Source: The Economic Times, Feb 08, 2019

BENGALURU- Indian inflation reversed course and nudged up slightly in January but remained below the central bank’s target for a sixth straight month, a Reuters poll predicted, supporting this week’s unexpected move by policymakers to cut rates.

On Thursday, the Reserve Bank of India caught financial markets off-guard by reducing its key policy rate by 25 basis points to boost growth and as inflation has remained benign.

While a change in monetary policy stance to “neutral” was the consensus in a separate poll taken ahead of the Feb 7 meeting, only around a third of respondents expected any easing.

The latest Reuters poll of 30 economists surveyed before Thursday’s RBI meeting suggested consumer price inflation accelerated to 2.48 percent from a year ago, after slowing in December to its lowest rate since June 2017 at 2.19 percent.

“The disinflation from food and fuel are probably going to start fading, we don’t anticipate inflation to drag from these factors,” said Vishnu Varathan, head of economics and strategy for Asia at Mizuho Bank. “We might see inflation normalizing back to their 3-4 percent range by the middle of this year.”

Food and beverage inflation accounts for nearly half of the overall basket and prices for these items were down in the previous four months.

Forecasts in the poll ranged from 2.00 percent to 2.80 percent. If the consensus is realised it would mark the sixth month in a row where inflation was below the RBI’s medium-term target of 4 percent.

“Even though inflation is expected to inch up, the evolution is likely to remain benign amid muted demand side pressures. This should provide the central bank room for another cut,” said Shashank Mendiratta, economist at IBM.

But the disparity between core inflation, which is running closer to 6 percent, and the headline figure remains wide and could weigh on the RBI’s monetary policy path, said Prakash Sakpal, Asia economist at ING, citing similar concerns expressed by the new RBI Governor Shaktikanta Das.

December retail inflation at 18-month low of 2.19%

Source: The Economic Times, Jan 14, 2019

New Delhi: Wholesale and retail inflation eased further in December on the back of cooling food and fuel prices, raising the prospects of a reversal of policy stance at the next central bank meeting, or even that of rate cut to stimulate growth.

India’s headline inflation rate based on the consumer price index (combined) eased to an 18-month low of 2.19% in December, down from 2.33% in November and 5.21% in December 2017, according to official data released on Monday. Read the rest of this entry »

Inflation in Dec likely hit lowest since June 2017: Reuters poll

Source: The Hindu Business Line, Jan 10, 2019

India’s December retail inflation is expected to have eased to its lowest since June 2017 as food costs fell and fuel prices rose at a slower pace, a Reuters poll showed, giving the central bank breathing space to keep policy on hold.

Inflation likely cooled to 2.20 per cent in December – close to the lower end of the Reserve Bank of India’s medium-term target range of 2.0-6.0 per cent – according to the Jan 3-9 poll of 41 economists. In November, inflation was at 2.33 per cent. “Food prices fell more in December. Which maybe just a seasonal thing, but I see that as the main factor, a potential downside factor for inflation,” said Prakash Sakpal, Asia economist at ING.

Price pressures

If the latest consensus is realised it will mark the fifth month in a row consumer price inflation has held below the mid-point of the RBI’s target band. Forecasts ranged between 1.80 per cent and 3.00 per cent, and suggested price pressures are easing off from earlier in 2018. Read the rest of this entry »

Inflation remained within comfort zone for most of 2018, but farmers hit

Source: Business Standard, Dec 30, 2018

New Delhi: Inflation seems to have become a double-edged sword for policy makers with political opponents attacking the government over farmers getting hit due to low prices for agricultural produce, even as the rate of price rise in 2018 has mostly been contained within the targeted comfort zone.

The data showed retail as well as wholesale price inflation remaining low for most part of the year, though spikes in petrol and diesel prices came as a spoiler.

The retail inflation, measured as per the Consumer Price Index (CPI), remained mostly below 5 per cent, within the RBI’s comfort level of 4 per cent with a bias of plus/minus 2 per cent. January was the only month when it crossed 5 per cent.

The Wholesale Price Index (WPI) based inflation is now at a 3-month low of 4.64 per cent, having oscillated in a range of 2.74-5.68 per cent during the year. Read the rest of this entry »