Key Highlights
- Overall WPI Inflation
- India’s Wholesale Price Index (WPI)-based inflation rose to 2.38% in February from 2.31% in January.
- Manufactured Products Inflation
- Inflation in manufactured products (which carry a 64.2% weight in the index) rose to 2.86% in February from 2.51% in January.
- Key drivers within manufactured goods included:
- Food products: 11.06%
- Vegetable and animal fats: 33.6%
- Tobacco: 2.74%
- Paper products: 2.1%
- Chemicals and chemical products: 1.26%
- Semi-finished steel: 0.51%
- The rise was partly driven by increasing industrial metal prices and global commodity price momentum.
- Global Influence
- The Bloomberg Commodity Price Index rose by 4.1% in January and 9.2% in February, reversing a six-month deflationary trend.
- Geopolitical factors and global trade uncertainties are expected to remain key influencers on commodity prices and inflation.
- Food Price Inflation
- Inflation in food items declined sharply to 3.38% in February from 5.88% in January.
- Prices decelerated for:
- Cereals: 6.77%
- Paddy: 5.17%
- Wheat: 9.58%
- Potato: 27.54%
- Eggs, meat, and fish: 1.48%
- Prices of pulses (1.04%) and vegetables (5.8%) contracted.
- Sharp price rise observed in:
- Onion: 48.05%
- Fruits: 20.88%
- Fuel and Power Category
- Deflation in fuel and power narrowed to -0.71% in February from -2.78% in January.
- Expert Outlook
- According to Rajani Sinha (Chief Economist, CARE Ratings), food inflation is expected to remain benign, aided by fresh Rabi harvest and good reservoir levels.
- Caution remains necessary regarding weather-related disruptions and global commodity volatility.
India’s slight uptick in WPI inflation in February was driven by rising prices in manufactured goods and narrowing fuel price deflation, while food inflation showed signs of easing. With global commodity markets regaining strength and geopolitical factors remaining uncertain, inflation dynamics will continue to be closely monitored.
Source: BS
