India’s inflation eases to 3.85 percent

14/03/2023

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India’s inflation eases to 3.85 percent

As per the provisional data from the Commerce Ministry, India’s wholesale price index (WPI)-based inflation comforted to 3.85 per cent in February on an annual basis from 4.73 per cent in January.

The month-on-month change in WPI index for February experienced an increase of 0.20 per cent as against 0.13 per cent in the preceding month.

Primary contribution in fall:

The primary contribution in declining in the rate of inflation in February, 2023 is fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment and motor vehicles, trailers & semitrailers.

The rate of inflation based on WPI Food Index decelerated from 2.95 per cent in January, 2023 to 2.76 per cent in February, 2023.

Advantages by declining WPI:

The latest WPI number might be favorable for corporate as a dip in wholesale prices might ease pressure on corporate earnings.
Lower input costs might also prefigure well for retail prices.
For the primary articles segment, the inflation rate allayed to 3.28 per cent from 3.88 per cent in the previous month.

About Wholesale Price Index:

The WPI is one of the two indices that measure inflation in India and the other one is Consumer Price Inflation (CPI).
The WPI calculates by the prices at the level of production or manufacturing, taking into account goods traded between companies.
The CPI is measured by the prices at the retail consumer level.

Important data about inflation:

Wholesale inflation in crude petroleum and natural gas relieved significantly to 14.47 per cent from 23.79 per cent in January.
February’s fuel and power inflation corrected to 14.82 per cent as against 15.15 per cent last month.
Inflation for manufactured products registered at 1.94 per cent in February.
In May last year, the WPI had mounted by 15.88 per cent, the highest since September 1991, due to rising prices for crude petroleum and natural gas, food items, basic metals and chemical products.