Cheaper food brings wholesale inflation down to a record -2.33%

Wholesale inflation (WPI) for the month of March has come at a record low of -2.33% as against -2.06% in February and 6% for March 2014. This is the fifth straight month of WPI decline. 

According to the data released by the Minister of Commerce and Industry, inflation in food items declined by 0.4% due to fall in prices of tea, coffee, eggs, rice and pork. 

Fruits and vegetables dropped by 1% each and so did beef and buffalo meat. 

Prices of poultry chicken mutton, fish, maize, ragi, bajra, gram and milk rose up. 

Higher prices of jet fuel, furnace oil, petrol, naptha and kerosene meant that inflation in fuel and power rose by 3.3% as against February but fell 12.56% on a year-on-year basis. 

Manufactured products, with a weight of 65% on the index, declined by 0.1%. 

The government revised wholesale inflation figures for the month of January to -0.95% as against -0.39% as reported earlier. 

As per the CPI inflation data released last week, retail inflation fell to a 3-month low of 5.17% cent in March on the back of easing food prices.

The decline in inflation and a positive industrial output data would give room to the Reserve Bank to consider a cut in interest rates as has been the demand of the industry.

Besides, industrial output growth jumped to nine-month high of 5% in February on better performance of manufacturing sector and higher offtake of consumer as well as capital goods. 

(with agencies)