February WPI inflation declines to 4-month low of 0.2%

The wholesale price index (WPI), which is a gauge of inflation at the producer level, moderated to a four-month low of 0.20% in February, as per the data released by the Union commerce ministry on Thursday, March 14.

The overall WPI inflation rate was 0.27% in January, whereas it stood at 0.86% in December.

The decline last month was led by a slump in the inflation rate of manufactured goods, which stood at -1.27% as compared to -1.13% in January, and the rate of fuel and power which decelerated to -1.59% from -0.51%.

The last time when the commerce ministry reported a lower WPI inflation rate was in October, when it stood at -0.26%.

In the fiscal year 2023-24 so far, wholesale inflation has edged lower, averaging at around -0.8%.

Food prices up in February

Wholesale food inflation soared to 4.09% in February, as compared to 3.79% in January. Vegetable inflation, which is one of the key drivers of the upward trend, increased to 19.78% from 19.71%in the preceding month.

Prices of pulses grew by 18.48%, whereas the rate of wheat and paddy, two principal food items, increased by 6.63% and 10.25%, respectively. However, inflation in the category of eggs, meat and fish declined to -0.47%.

The wholesale inflation data was released by the commerce ministry two days after it reported a retail inflation rate of 5.09% in February. This was almost in line with the retail inflation of 5.10% recorded in January.