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WPI Inflation at 3-Month High in March on Costlier Food, Fuel

Inflation in ‘food articles’ basket hardened to 5.68 percent during March 2019, as against 4.28 percent in February

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India
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Wholesale price inflation rose to a 3-month high of 3.18 percent in March on costlier food and fuel, government data released on Monday, 15 April, showed.

The Wholesale Price Index (WPI)-based inflation was at 2.93 percent and 2.76 percent in February and January this year, respectively, and 3.46 percent in December 2018. It was 2.74 percent in March last year.

Inflation in the ‘food articles’ basket hardened to 5.68 percent during March 2019 as against 4.28 percent in February, as prices of vegetables skyrocketed.

Vegetable inflation was at 28.13 percent in March, up from 6.82 percent in the previous month. However, inflation in potato cooled substantially to 1.30 percent, from 23.40 percent in February.

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Pulses and wheat witnessed some cooling in inflation at 10.63 percent and 10.13 percent, respectively. Also protein rich items such as 'egg, meat and fish' saw inflation fall to 5.86 percent during March.

Deflation in onion was 31.34 percent, while the same in fruits was 7.62 percent during the month.

Wholesale inflation in the 'fuel and power' category, however, spiked to 5.41 percent, from 2.23 percent in February.

Inflation is diesel shot up to 7.33 percent during the month from 3.72 percent in February. In petrol, inflation was 1.78 percent in March, as against a deflation of 2.93 percent in the previous month.

The Reserve Bank of India, which mainly factors in retail inflation for monetary policy decision, had earlier this month cut interest rates by 0.25 percent to 6 percent, while projecting retail inflation to be at 2.9-3 percent, mainly due to lower food and fuel prices as well as normal monsoon.

Meanwhile, the India Meteorological Department Monday forecast that monsoon is likely to be "near normal" this year.

Data released last week showed retail inflation accelerated to 2.86 percent in March from 2.57 percent a month ago.

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