India’s WPI Inflation Jumps To A 27-Month High In February
A wholesale market in Patna, Bihar, India, on Friday, Feb. 26, 2021. Photographer: Anindito Mukherjee/Bloomberg

India’s WPI Inflation Jumps To A 27-Month High In February

Wholesale inflation in India jumped to the highest in more than two years as commodity prices rose.

The Wholesale Price Index-based inflation stood at 4.17% in February 2021—the highest since November 2018—against 2.03% in January, according to data released by the Ministry of Commerce and Industry on Monday.

Retail inflation, too, climbed to a three-month high of 5.03% in the reported month against 4.06% in January.

Core inflation rose further to a series high of 5.5% in February 2021, according to estimates by Aditi Nayar, principal economist at ICRA. This was despite a sequential dip recorded by basic metals, Nayar said, adding that the uptrend is expected to persist until May 2021. The headline WPI inflation is estimated to harden further to between 9% and 9.5% , and the core-WPI inflation to climb to 7-7.5% by May 2021, before displaying a more gradual moderation to 4% each by the end of 2021, Nayar said.

Inflation Internals In February 2021:

  • Manufactured products inflation stood at 5.81% compared with 5.13% in January.

  • Primary articles inflation stood at 1.82% in February against a contraction of 2.24% in the preceding month.

  • Prices of food articles rose 1.36% against a drop of 2.8% in January.

  • Prices of non-food articles rose 3.95% against an increase of 4.16% in the previous month.

  • Fuel and power index rose 0.58% against a fall of 4.78% in January 2021.

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