WPI inflation eases to 2.26% in Feb

Wholesale price index (WPI) based inflation softened to 2.26% in February on the back of cheaper food items and vegetables, the government data showed on Monday.

In January, the WPI inflation stood at 3.1% and in the year-ago same period it was at 2.93%, as per the data from the commerce and industry ministry.

The WPI inflation for food articles for February 2020 came in at 7.79% as against 11.51% in the previous month.

The rate of price rise for onion and potato too came down to 162.30% and 60.73%, respectively as against 293.37% and 87.84% in January 2020.

Build up inflation rate in the current financial year so far was 1.92% compared to a build up rate of 2.75% in the year-ago period, it added.

In the fuel and power category, wholesale inflation during the month eased to 3.38% while for non-food articles it slowed to 6.82%.

For eggs, meat and fish category, the inflation went up to 6.88% and for manufactured products it was higher at 0.42%.

WPI inflation for LPG gas jumped to 21.85 per cent during the month as against 1.78% in January.

“The considerable decline in the WPI inflation in February 2020 is in line with our forecast, led primarily by food items, as well as a modest contribution of the correction in prices of crude oil and minerals, which would intensify in the ongoing month,” said Aditi Nayar, economist with ICRA.

In contrast, the core-WPI recorded a narrower disinflation in February 2020, which is expected to reverse reflecting the growing impact of the coronavirus outbreak on prices, demand and sentiment, she added.