WPI inflation cools to 10-month low in Jan

NEW DELHI: Inflation based on whol e s a l e p r i c e s fell to a 10-month low of 2.76% in January over the previous month on softening prices of fuel and some food items, according to government data released on Thursday.

The Wholesale Price Index (Wpi)-based inflation stood at 3.8% in December, 2018, and 3.02% in January 2018. WPI i nf l at i on s t ood at 2 . 7 4 % i n March 2018.

Inflation in kitchen essentials like potato, onion, fruits, and milk softened in January over the previous month, the data revealed.

However, the rate of price ri se i n t he f ood basket, as a whole, r ose t o 2 . 3 4 % i n t he month under review compared to a deflation (-0.07%) in the previous month.

The retail inflation, released earlier this week, too declined marginally to 2.05% in January over the previous month on continued decline in food prices, including vegetables and eggs.

The Wholesale Price Index data f urther r evealed t hat wholesale based price inflation for ‘fuel and power’ segment fell sharply to 1.85% as against 8.38% in December 2018, due to easing in prices of motor fuel a n d LPG. Al s o , t h e r e was decrease in inflation in manufactured products basket in spite of higher in some items like sugar and apparel.

The Reserve Bank (RBI), which mainly factors in retail inflation based Consumer Price Index (CPI), had cut the key l e ndi ng r a t e by 0 . 2 5 % t hi s month. The decline in inflation may provide further head-room to the central bank to cut interest rate (repo) i n c o mi n g months, experts said.