Inflation cools to minus 0.9% in January as food prices ease

Reversing four months of rising trend, WPI inflation fell to minus 0.9% in January as food articles, mainly vegetables and pulses, turned cheaper.

The Wholesale Price Index-based inflation (WPI) was minus 0.73% in December. In January 2015, it was minus 0.95%.

This is the 15th straight month since November 2014 that deflationary pressure persisted and wholesale inflation has remained in the negative zone.

Food inflation stood at 6.02% in January as against 8.17% in December, showed official data which were released on Monday.

Inflation in pulses and onion eased to 44.91% and 5.51%, respectively. The rate of price rise in the case of vegetables was 12.52% in January and for fruits, it stood at minus 2.32%. Price growth in potato was minus 17.08% while that of egg, meat and fish came in at 5.69%.

The inflation print in the fuel and power segment was minus 9.21% and for manufactured products, it read minus 1.17% in January. The November Inflation has been revised to minus 2.04% from the provisional estimate of minus 1.99%.

Last week, data showed that retail inflation has been rising for six straight months and stood at a nearly one-and-a-half-year high of 5.69% in January.

The central bank looks into mainly retail inflation data while firming up its monetary policy stance. The Reserve Bank of India (RBI) also takes into account industrial production numbers.

As per latest data, Index of Industrial Production (IIP) contracted 1.3% in December as against a decline of 3.4% in November.