WPI Inflation rises to over three year high at 6.5% on food, fuel prices

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The Wholesale price index-based inflation (WPI) jumped to a 39-month high of 6.55 per cent in February compared to 5.25 per cent in the previous month on the back of expensive food and fuel items, even as manufacturing products saw a decline in inflation. The data justifies the Reserve Bank of India’s caution on loose monetary stance amid expected increase in interest rates in the United States in the next few days.

 

Expectations are that the consumer price index (CPI)-based inflation would also break its six-month declining spree in February on the support of food prices. The data for CPI inflation would come later today.

 

Icra principal economist Aditi Nayar pegged CPI inflation at 3.9 per cent in February against 3.2 per cent in January.

 

With this, the gap between WPI and CPI, which has been widening in the last few months, would narrow down.

 

In fact, food has a higher weight of over 45 per cent in CPI than just 14.3 per cent in WPI. higher weight of over 45 per cent in CPI than just 14.3 per cent in
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