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Wholesale Inflation stands at 2.47% in March; manufacturing index rises

Wholesale Inflation stands at 2.47% in March; manufacturing index rises

Wholesale prices climbed 2.47 percent year-over-year in March, nearly in line with February's 2.48 percent increase.

It may be recalled that WPI inflation was at 5.11 per cent in March previous year.

On a sequential basis, expenses on primary articles, which constitute 22.62 percent of the WPI's total weightage, inched up by 0.24 percent, from an increase of 0.79 percent in February.

Inflation in onion continued to stay high at 42.22 per cent and in potato at 43.25 per cent.

Deflation in vegetables was 2.70 percent, pulses (20.58 percent) and wheat (1.19 percent) in March.

The overall prices have fallen, as food articles have turned cheaper in the last few months. Manufactured products inflation was at 3.03 per cent even as sugar prices fell 10.48 per cent during the month, as per the monthly data.

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Given the expectations of more moderate GDP growth and inflation of 5.2% and 2.5%, respectively, in 2018, the research house does not envisage further hikes in the Overnight Policy Rate (OPR) this year.

"Given that the high-base effect is expected to continue to moderate the contribution from the transport component, headline inflation is envisaged to ease to 2.5% in 2018 after charting 3.7% in 2017".

Britons are believed to have benefited from slightly weaker food prices, which had surged on the back of the weaker pound, as well as a bigger month-on-month drop in fuel prices than a year earlier.

According to industry body PHD Chamber, the consistent decline in WPI indicated "that the government has undertaken effective measures at the ground to address the supply side problems of the economy during the last few years". However, the March 2018 inflation is higher than 3.89 per cent recorded in the same month a year ago.

Moreover, the retail inflation eased to 4.28 per cent, a five-month low in March, but remained above RBI's medium-term target, supporting views that monetary policy is likely to remain unchanged at the next review in early June.

However, if the firmness in the core inflation at the retail level continues, it will soon begin to reflect at the wholesale level as well, Sinha said. Find us on Facebook too!